Full text of Mimeograph Letters and Statements of the Board : Correspondence re Opinions of Federal Reserve Counsel on Subject of "Cashing" Government Checks and Warrants, Number X-7169, Volume 36, Page 383

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t 383
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD

X-7169
June 6, 1932.

Dear S i r :
This r e f e r s to my l e t t e r s of May 7 and August 14, 1931,
with t h e i r r e s p e c t i v e i n c l o s u r e s , on the s u b j e c t of "cashing"
Government checks and w a r r a n t s "by Federal reserve "banks.
As you w i l l remember, I addressed a memorandum to the
Federal Reserve Board under d a t e of A p r i l 17, 1931, d i s c u s s i n g
t h i s s u b j e c t in d e t a i l and recommending t h a t i t be r e f e r r e d to the
Governors' Conference; the Governors' Conference i n A p r i l , 1931,
r e f e r r e d the s u b j e c t to the Standing Committee on C o l l e c t i o n s f o r
study and r e p o r t to the F a l l Conference of Governors; the Standing
Committee on C o l l e c t i o n s rendered a r e p o r t under d a t e of August 10,
1931; and the Governors' Conference in December, 1931, r e f e r r e d the
s u b j e c t to the Conference of Counsel of Federal reserve banks f o r
c o n s i d e r a t i o n and c o n s u l t a t i o n with the Standing Committee on
C o l l e c t i o n s and o f f i c i a l s of the Treasury Department, with a view
to o b t a i n i n g a c l a r i f i c a t i o n of the a p p l i c a b l e p r o v i s i o n s of Treasury
Department C i r c u l a r Ho. 176.
For your f u r t h e r information in t h i s connection, I i n c l o s e
copies of the f o l l o w i n g :




1.

L e t t e r of August 19, 1931, from Mr, Robert S.

X-7169

t

P a r k e r , Counsel to the Federal He serve Bank of A t l a n t a , d i s c u s s i n g my l e t t e r of August 14, 1931,
above r e f e r r e d t o ;
2.

L e t t e r of September 11, 1931, from Mr. A, 0 .

Agnew, Counsel to t h e Federal Reserve Bank of San
F r a n c i s c o , a l s o d i s c u s s i n g my l e t t e r of August 14,
1931;
3.

L e t t e r of November 28, 1931, from Mr, James 6,

McConkey, Counsel to the Federal Reserve Bank of
S t . Louis, i n c l o s i n g a memorandum which he had p r e pared d i s c u s s i n g the r e p o r t rendered by the Standing
Committee on C o l l e c t i o n s and my l e t t e r of August 14, 1931;
4.

L e t t e r of December 14, 1931, which I addressed to

Mr. McConkey i n response to h i s l e t t e r of November 28, 1931;
5.

L e t t e r of January 6, 1932, from Mr. J . P . D r e i b e l b i s

of the f i r m of Locke, Locke, Stroud and Randolph, Counsel
to the Federal Reserve Bank of D a l l a s , i n c l o s i n g a f i l e
of correspondence concerning Treasury checks which were i n volved in the f a i l u r e of a n a t i o n a l bank i n Texas;
6.

L e t t e r of Juno 1, 1932, from Mr. J . S. Walden, J r . ,

Chairman of the Standing Committee on C o l l e c t i o n s , d i s cussing the p o s s i b i l i t y of holding a conference on t h i s
s u b j e c t ; and




7.

My r e p l y of June 2, 1932,

38#

I 385
X-7169

The p r e s s u r e of more urgent m a t t e r s has rendered i t
impossible f o r me t o give c o n s i d e r a t i o n h e r e t o f o r e to the question
of a r r a n g i n g a conference on t h i s s u b j e c t , and I b e l i e v e i t w i l l be
impossible f o r t h i s o f f i c e or the o f f i c i a l s of the Treasury Department to p a r t i c i p a t e i n such a conference u n t i l sometime a f t e r
Congress a d j o u r n s ; b u t I t h i n k we ought to have i t a t the e a r l i e s t
date convenient to a l l concerned.

We cannot make any d e f i n i t e

plans u n t i l we know when Congress w i l l a d j o u r n , but I s h a l l a p p r e c i a t e an expression of your views a s to the time most s u i t a b l e and
convenient f o r such a conference.
Cordially yours,

Walter Wyatt,
General Counsel.
Enclosures*

TO COUNSEL OF ALL FEDERAL OBSERVE BANKS.




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COPY

X-7169-a

COLQUITT, PARKER, TROUT MM & AEKWRIGHT
Attorneys a t Law
S u i t e 1607 William-Oliver Bldg.
A t l a n t a , Ga.
August 19, 1931.
PERSOML.
Mr. Walter % a t t , General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Walter:
I have received your l e t t e r of August 14th, sent f o r
my p e r s o n a l and c o n f i d e n t i a l information and e n c l o s i n g a copy
of a l e t t e r which you have w r i t t e n t o the Chairman of t h e
Standing Committee on C o l l e c t i o n s concerning t h e Committee's
r e p o r t on the s u b j e c t of "cashing" Government checks arid
warrants by F e d e r a l r e s e r v e "banks.
I approve most h e a r t i l y the views s e t out i n your
l e t t e r , I have always f e l t t h a t i f t h e matter were put up
t o t h e Treasury Department i n a vigorous way by t h e Federal
r e s e r v e banks a c t i n g i n c o n c e r t , t h e present c o n f l u s i o n would
be e l i m i n a t e d . As the s i t u a t i o n now i s , no Federal r e s e r v e
bank knows whether a Government item i s a c t u a l l y "cashed" or
p a i d when p r e s e n t e d to t h e bank f o r t h a t purpose and charged
t o the Treasury account, and, i n f a c t , i t seems t o me t h a t t h e
Treasury has no f i x e d p o l i c y about t h e m a t t e r . Sometimes
t h e p o s i t i o n i s taken t h a t a check i s p a i d when cashed by
i t s f i s c a l agent and charged t o i t s account. Sometimes
t h e opposite p o s i t i o n i s assumed.
I b e l i e v e t h e matter i s of s u f f i c i e n t importance t o
j u s t i f y a conference of counsel, p a r t i c u l a r l y s i n c e t h e r e
a r e d o u b t l e s s o t h e r questions which could be p r o f i t a b l y cons i d e r e d a t such a conference.
As r e g a r d s the payment or cashing of Government
checks or w a r r a n t s , the p o s i t i o n of the Federal r e s e r v e banks
i s rendered even more u n c e r t a i n by the doubt which e x i s t s
a s t o whether or not such warrants a r e n e g o t i a b l e i n s t r u m e n t s .
There a r e many other i n t e r e s t i n g angles which ought t o have




t

X-7169-a
COLQUITT, PARKER, TROUTMA2T & AEKWRIGHT
Continuation Sheet
Mr. Walter Wyatt - #2.

8-19-31.

c o n s i d e r a t i o n . My own view i s t h a t when a Federal r e s e r v e
bank takes one of these warrants i n r e g u l a r course of b u s i n e s s ,
pays or cashes the same and charges the item to tfce Treasury
account, the payment ought to be regarded as f i n a l u n l e s s , of
course, t h e i n s t r u m e n t , upon r e c e i p t a t the Treasury, should
be found to be forged or to have been paid upon a gorged
endorsement or u n l e s s t h e r e e x i s t s some other reason why t h e
warrant was not p r o p e r l y payable upon p r e s e n t a t i o n a t t h e
o f f i c e of t h e F e d e r a l r e s e r v e bank;
I t r u s t t h a t you w i l l have a p l e a s a n t v a c a t i o n and
know t h a t you have earned very much more r e s t than you can
o b t a i n i n two or t h r e e weeks. I have not been away t h i s
summer and do not expect to get away. That f a c t does n o t ,
however, prevent me from preaching to others t h e n e c e s s i t y
for vacations.
With s i n c e r e personal r e g a r d s , I am
Cordially y o u r s ,

(S)
RSP/w.




Robt. S. P a r k e r .

3 8 7 .

r 388
COPY

X-7169-b
FEDERAL RESERVE MM. OF SAN FRANCISCO
September 11, 1931.

(CONFIDENTIAL)
Walter Wyatt, E s q . ,
General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Hfy-att:
Reference i s made to your l e t t e r dated August 14,
t r a n s m i t t i n g f o r my "personal and c o n f i d e n t i a l i n f o r m a t i o n "
copy of your l e t t e r w r i t t e n t o t h e Chairman of the Standing
Committee on C o l l e c t i o n s with regard to t h e Committee's
r e p o r t on the s u b j e c t of "Cashing" Government checks and
warrants by Federal Reserve Banks.
I have only r e c e n t l y had the opportunity of
examining t h e Committee's r e p o r t . This I have done i n conf e r e n c e w i t h t h e o f f i c e r s of t h i s bank. I agree w i t h t h e
major p o r t i o n of what you have t o say i n your l e t t e r of
August 13 (X-6944).
C e r t a i n l y , the Treasury c i r c u l a r should contain
a c l e a r statement with regard t o the r e s p o n s i b i l i t y of
Federal Reserve Banks i n cases where payment i s stopped on
checks f o r which immediate c r e d i t has been given. I b e l i e v e
t h a t t h e Treasurer should not recognize any stop-payment
order u n t i l f i r s t communicating with the Federal Reserve
Bank a f f e c t e d to a s c e r t a i n whether or not c r e d i t has been
passed and i f s o , whether reimbursement can be o b t a i n e d .
I a l s o b e l i e v e t h a t a g r e a t deal of the d i f f i c u l t y h e r e t o f o r e encountered could be obviated by e l i m i n a t ing e n t i r e l y from paragraph 32 of t h e Treasury c i r c u l a r
a l l r e f e r e n c e to what the Federal Reserve Banks w i l l do
under given circumstances. I t seems to me t h a t such
r e f e r e n c e merely confuses the s i t u a t i o n and leaves i n doubt
t h e c a p a c i t y i n which such banks a r e a c t i n g . I a l s o
b e l i e v e t h a t t h e Treasury Department should i n c o r p o r a t e
i n i t s c i r c u l a r a c l e a r statement to the e f f e c t t h a t Fede r a l Reserve Banks, i n handling Government checks and
w a r r a n t s , a r e a c t i n g s o l e l y as agents of the banks from
which such checks a r e r e c e i v e d , and I cannot see why t h e
Treasurer should have any o b j e c t i o n to making such a s t a t e ment.



/

3 8 9

X-7169-b
Walter %ratt, Esq.

-2-

September 11, 1931.

Mr. Clerk, the Deputy Governor of t h i s bank, who
i s probably as conversant with operating procedure as any
man i n the system and whose ideas on s u b j e c t s of t h i s chara c t e r a r e extremely c l e a r c u t , i s of the opinion t h a t a l l
r e f e r e n c e to payment of Government checks through c l e a r i n g
houses should be e l i m i n a t e d , i n order t h a t i t may be
a d d i t i o n a l l y c l e a r t h a t such items w i l l not be handled f o r nonmember banks, d i r e c t l y or i n d i r e c t l y . I t h i n k t h a t t h e word
"Cashing" Government checks and warrants should be eliminated
e n t i r e l y . Such items a r e not "cashed" i n f a c t except i n
the case of items drawn by d i s b u r s i n g o f f i c e r s of t h e Government . I do not b e l i e v e t h a t i t i s necessary or a d v i s a b l e
t h a t i n t h e Treasury c i r c u l a r Federal Reserve Banks be
denominated e i t h e r as f i s c a l agents or d e p o s i t a r i e s of t h e
United S t a t e s , and t h a t t h i s dilemma, which has p r e v i o u s l y
e x i s t e d , could be obviated by making i t c l e a r t h a t i n handl i n g Government checks and warrants Federal Reserve Banks
a c t only as a g e n t s of t h e i r d e p o s i t o r s and not i n any agent
c a p a c i t y f o r t h e Government.
C e r t a i n l y , t h e c i r c u l a r should be c l a r i f i e d and
can be c l a r i f i e d , but I do not b e l i e v e t h a t t h i s w i l l be
accomplished u n t i l we have an a b s o l u t e "show-down" with the
Treasury Department, i n which we make i t p l a i n t h a t t h e i r
c i r c u l a r must be prepared i n such form as t o o f f e r adequate
p r o t e c t i o n t o the Federal Reserve Banks and t h a t u n l e s s
t h i s i s done t h e banks w i l l accept Government items only f o r
d e f e r r e d c r e d i t . This can be b e s t accomplished, i n my
opinion, through a conference with the Treasury o f f i c i a l s
a t which counsel f o r t h e Reserve Banks and the o p e r a t i n g
o f f i c e r s of such banks a r e p r e s e n t . Of course, no such
conference should be held u n t i l a preliminary conference
between Federal Reserve Bank o f f i c e r s and counsel has been
h e l d i n order t h a t when we meet ' n t h the Treasury Department
we may be agreed as t o what we want.
P l e a s e understand t h a t the foregoing a r e only my
p e r s o n a l views. I f e e l c e r t a i n t h a t i f determined a c t i o n i s
taken, something d e f i n i t e and s a t i s f a c t o r y can be accomplished.
Very t r u l y yours ,

(S)

ACA:MA



Albert C. Agnew
Counsel.

COPY

X-7169-c

3 9 0

FEDERAL RESERVE BAH
OF
ST. LOUIS
November 28, 1931
Mr. Walter Wyatt, General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Ifyatt:

Enclosed you w i l l f i n d copy of a memorandum I handed
Governor Martin on the subject of t h e r e p o r t of t h e Standing
Committee on_Col1ections_on "Cashing Government Checks and
Warrants." I am not i n a p o s i t i o n to know t h e d i f f i c u l t i e s the
o p e r a t i n g Committee had to contend with i n meeting t h e l e g a l
requirements suggested by the Counsel's Committee, n e v e r t h e l e s s ,
I do not "believe the Governors' Conference should a c t on the
r e p o r t u n t i l t h e s e d i f f e r e n c e s have been ironed out - and I so
advised Governor Martin.
I r e g r e t t e d t h a t I could not be h e r e when t h e Committee
met i n S t . Louis. Upon Mr, Walden's i n v i t a t i o n , I had made my
arrangements t o be h e r e , but was suddenly c a l l e d upon to go with
one of the N a t i o n a l Bank Examiners t o Corinth, Miss, t o pass on
t h e l e g a l i t y of an arrangement whereby the City of Corinth was
loaning one of t h e member banks i n the town c e r t a i n bonds owned
by t h e c i t y to be used as c o l l a t e r a l t o the b a n k ' s borrowings from
t h e Federal Reserve Bank.
When we a r r i v e d a t 9:00 a . m . , t h e City Council were a l l
assembled ready t o pass any ordinance I found necessary f o r them
to p a s s , i n order to give t h e bank the r i g h t t o use t h e bonds a s
c o l l a t e r a l with the Reserve Bank. They signed on t h e d o t t e d l i n e .
I then prepared and had the Board of D i r e c t o r s of t h e
bank sign t h e necessary Resolution a u t h o r i z i n g t h e pledging of
the bonds to t h e Reserve Bank. We f i n i s h e d i n time f o r t h e member
bank t o t a k e t h e s e bonds 150 miles by automobile t o Memphis, arrange
f o r the loan, and secure t h e necessary funds t o continue business the
next day as u s u a l , - otherwise, they would not have been a b l e to
remain open.




With k i n d e s t r e g a r d s ,
Very t r u l y y o u r s ,
(S)

J a s . G. Mc Conkey,
Counsel.

391
COPT

'

X-7169-c-l

Itovember 27, 1931
Mr. to. Mc C. Martin, Governor,
F e d e r a l Reserve Bank of St. Louis,
S t . Louis, Mo.
Dear itr. Martin:
R e f e r r i n g to the l e t t e r s u b j e c t "Cashing of Government
Checks and Warrants by Federal Reserve Banks" signed by Mr. Walden,
Chairman of t h e Standing Committee on C o l l e c t i o n s , dated August
12, 1931, and t h e suggestions contained t h e r e i n t h a t , i f i n the
opinion of t h e s e v e r a l Counsel, no s e r i o u s l e g a l o b j e c t i o n s be
found t h e r e i n the r e p o r t submitted by the Committee under d a t e of
t h e 10th, i t would be submitted t o t h e next Governors' Conference.
The s u b j e c t of Cashing Government' Checks and Warrants has
been the source of a g r e a t deal of correspondence p a s s i n g between
t h e Reserve Banks of Richmond, A t l a n t a and Hew York, t h e Federal
Reserve Board and the Treasury Department, s i n c e 1922.
The s u b j e c t was discussed a t a Conference of Counsel f o r
t h e Federal Reserve Banks with r e p r e s e n t a t i v e from t h e Treasury
Department, under d a t e of June 10, 1930, a t which time a l l t h e
members of the Standing Committee on Collections (except Mr. A t t e bery) were p r e s e n t . Ho d e f i n i t e agreement was reached a t t h i s
Conference, but the following Resolution was adopted:
"RESOLVED, That the Chairman of t h e Governor's
Conference be requested to i n s t r u c t t h e Standing Committee
on C o l l e c t i o n s t o p r e p a r e a t e n t a t i v e d r a f t of a uniform
check c o l l e c t i o n c i r c u l a r embodying t h e r e i n t h e suggested
amendments t o Regulation J , the p r e p a r a t i o n of such
t e n t a t i v e d r a f t to be made i n c o l l a b o r a t i o n with a
sub-committee of Counsel t o the F e d e r a l r e s e r v e banks
(such sub-committee t o be appointed by Counsel to t h e
F e d e r a l Reserve Board and of which sub-committee Counsel
to the Federal Reserve Board s h a l l be a member ex o f f i c i o ) ,
with t h e understanding t h a t such t e n t a t i v e d r a f t , when
p r e p a r e d , s h a l l be submitted to the Federal r e s e r v e banks
f o r c r i t i c i s m and/or approval pending the adoption by the
Federal Reserve Board of t h e suggested amendments t o
Regulation J . "
Under d a t e of A p r i l 17, 1931, Mr. Hyatt advised the Federal
Reserve Board t h a t s i n c e t h i s s u b j e c t was so c l o s e l y i d e n t i f i e d with
b o t h the p r a c t i c a l operations of the Reserve banks and t h e i r l e g a l
l i a b i l i t i e s t h a t i t would be a d v i s a b l e f o r t h e Conference of Governors,
which was t o convene on A p r i l 27, 1931, t o r e f e r t h e m a t t e r back t o a
s p e c i a l Committee of Counsel and operating off! c i a l s f o r study and
report.




392

X-7169-c-l
2

Governor Martin.

Mr. Wyatt advised me under d a t e of J u l y 22, 1930 t h a t ,
a f t e r a t a l k w i t h Governor Calkins, Chairman of the Governor's
Conference, and Mr. Walden, he had named the Counsel f o r t h e
A t l a n t a , Richmond and Hew York "banks sinc e they had developed the
most of the d i s p u t e "between the "banks and the Treasury Department
on the s u b j e c t . Mr. Wyatt was an ex o f f i c i o member of t h e
committee.
The Standing Committee on Collections met i n S t . Louis
i n June 1931. Hone of t h e members of the Counsel's Committee were
h e r e . I had intended a t t e n d i n g the Conference, hut had "been c a l l e d
out of t h e City on l e g a l m a t t e r s and was not here when the Committee
met.
Under d a t e of August 14, 1931, Mr. Iftratt forwarded to me
copy of l e t t e r he had w r i t t e n Mr. Walden, i n which strenuous object i o n s were i n t e r p o s e d t o c e r t a i n p a r t s of the r e p o r t . Some of the
o b j e c t i o n s I t h i n k a r e well taken. I t would, t h e r e f o r e , appear to
me t h a t t h e questions i s not ready to be acted upon by t h e Governor's
Conference i n t h e f a c e of the o b j e c t i o n s o f f e r e d by Mr. Htyatt - but
r a t h e r t h a t the matter be r e f e r r e d back to the j o i n t Committee of
Counsel and o p e r a t i n g o f f i c i a l s , so t h a t the se d i f f i c u l t i e s could be
ironed out b e f o r e any f i n a l a c t i o n i s taken by the Governor's Conference .




R e s p e c t f u l l y submitted

J a s . G. Mc Conkey,
General Counsel.

, 393
COPT

X-7169-4

December 14, 1931.
Mr. James G. McConkey,
Federal Reserve Bank of S t . Louis,
St. Louis, Missouri.
My dear Mr. McConkey:
I have read with much i n t e r e s t your l e t t e r of November
28, 1931, i n c l o s i n g f o r my information a copy of the memorandum
which you had given to Governor Martin on November 27, 1931, with
r e f e r e n c e t o t h e r e p o r t of the Standing Committee on C o l l e c t i o n s on
"cashing Government checks and w a r r a n t s " .
I am v e r y glad t h a t you t h i n k t h a t some of my o b j e c t i o n s
to the r e p o r t of t h e Standing Committee on C o l l e c t i o n s a r e well
taken, and I am very g r a t e f u l f o r your suggestion t h a t the matter
should be r e f e r r e d t o a j o i n t committee of counsel and o p e r a t i v e
o f f i c i a l s , so t h a t t h e s e d i f f i c u l t i e s could be ironed out b e f o r e
any f i n a l a c t i o n i s taken by t h e Governors' Conference.
I am a f r a i d , however, t h a t you a r e under the impression
t h a t t h e Sub-committee of Counsel appointed pursuant to the r e s o l u t i o n adopted by the Conference of Counsel f o r t h e Federal r e s e r v e
banks on June 10, 1930, was expected to a s s i s t the Standing Comm i t t e e on C o l l e c t i o n s i n d e a l i n g w i t h t h i s s u b j e c t and t h a t
t h e f a i l u r e of t h e Sub-committee of Counsel t o a t t e n d t h e meeti n g of t h e Standing Committee on Collections which was held
i n S t . Louis on June 23, 1931, and the consequent f a i l u r e of the
r e p o r t of the Standing Committee on Collections to conform to




X-7169-a
r2-

my views and those of Counsel f o r some of the Federal r e s e r v e
"banks, may have r e s u l t e d from some neglect or omission on my
p a r t , which i s not the c a s e .
The r e s o l u t i o n adopted by the Conference of Counsel
of the Federal r e s e r v e tanks on June 10, 1930, which i s quoted
i n your memorandum to Governor Martin, p e r t a i n e d s o l e l y t o t h e
r e v i s i o n of t h e uniform p r o v i s i o n s of the check c o l l e c t i o n c i r c u l a r s of t h e Federal r e s e r v e "banks so as to conform t o the
amendments t o Regulation J which had "been recommended "by the
Conference of Counsel.

I t had nothing whatever t o do with

the "cashing" of government checks and w a r r a n t s .

The Committee

of Counsel which I appointed pursuant to t h a t r e s o l u t i o n f u l l y
discharged i t s f u n c t i o n s when i t met with the Standing Committee
on Collections i n New York on or about August 1, 1930, and a s s i s t e d
i n the r e v i s i o n of the uniform p r o v i s i o n s of t h e check c o l l e c t i o n
c i r c u l a r s of t h e Federal r e s e r v e banks which were adopted and
promulgated by t h e Federal r e s e r v e banks, on September 1, 1930,
t h e d a t e on which the Board's amendment t o Regulation J became
effective.

Having f u l l y performed i t s f u n c t i o n s , t h a t committee

went out of e x i s t e n c e , s i n c e i t was not c r e a t e d as a s t a n d i n g
committee but only as a committee f o r a s p e c i f i c purpose.
I t i s t r u e t h a t , during the Conference of Counsel which
was h e l d h e r e i n June, 1930, we discussed with the Treasury
Department t h e p r o v i s i o n s of Treasury Circular No. 176 and
succeeded i n inducing t h e Treasury Department t o amend those
p o r t i o n s of i t s c i r c u l a r which d e a l t with the c o l l e c t i o n of



. 3 9 5

t3—

X-7169-d

bank checks "by the Federal r e s e r v e banks f o r t h e Treasury Department; but you w i l l remember t h a t we could not reach any a g r e e ment e i t h e r among ourselves or with o f f i c i a l s of t h e Treasury
Department r e g a r d i n g the r e v i s i o n of those p r o v i s i o n s of the
Treasury c i r c u l a r which p e r t a i n t o the "cashing" of government
checks and w a r r a n t s by the Federal r e s e r v e banks, and i t was
agreed to l e t t h a t matter remain i n abeyance i n d e f i n i t e l y .
My memorandum of A p r i l 17, 1931, which r e s u l t e d i n the
a c t i o n of t h e Governors' Conference of A p r i l 27 - 2 9 , 1931, r e f e r r i n g t o the Standing Committee on C o l l e c t i o n s the s u b j e c t of
the "cashing" of Government checks and w a r r a n t s , s t a r t e d an e n t i r e l y new chapter and an e n t i r e l y new e f f o r t to o b t a i n amendments to
the p r o v i s i o n s of the Treasury c i r c u l a r r e l a t i n g to the "cashing"
of Government checks and warrants; and the Sub-committee of Couns e l which had been appointed pursuant to the r e s o l u t i o n of June
10, 1930, had no a u t h o r i t y to d e a l with t h i s s u b j e c t , and was
not requested or i n v i t e d to a t t e n d the meeting of t h e Standirg
Committee on C o l l e c t i o n s or to a s s i s t t h a t Committee i n any way.
In my memorandum of A p r i l 17, 1931, suggesting t h a t
t h i s s u b j e c t be c a l l e d to the a t t e n t i o n of the Governors' Conf e r e n c e , i n order t h a t a f u r t h e r e f f o r t might be made t o p u r suadc the Treasury Department t o r e v i s e

and q u a l i f y t h e p r o -

v i s i o n s of Sections 32 and 34 of t h e Treasury Department
C i r c u l a r No. 176, as amended September 2, 1930, so as t o
d e f i n e c l e a r l y t h e s t a t u s of t h e Federal r e s e r v e banks i n
"cashing" government warrants and checks and so as to c l a r i f y



;*

3 9 6

X-7169-d
t h e i r d u t i e s and r e s p o n s i b i l i t i e s i n doing so, I suggested t h a t
i t would be a p p r o p r i a t e f o r the Governors' Conference t o r e f e r
the matter to t h e "Standing Committee on C o l l e c t i o n s , t o the
Conference of Counsel or to some other a p p r o p r i a t e committee f o r
f o r study and r e p o r t " .

The Board presented my memorandum to the

Governors' Conferonce, which r e f e r r e d t h e s u b j e c t t o t h e
Standing Committee on C o l l e c t i o n s f o r c o n s i d e r a t i o n and r e p o r t
without suggesting t h a t a Committee of Counsel should be appointed
to a s s i s t the Standing Cor.xd.ttee on C o l l e c t i o n s i n i t s c o n s i d e r a t i o n of t h e m a t t e r .

A f t e r the conference, both Governor Francher

and Mr. S t r a t e r t o l d me t h a t they thought t h e Governors' Conference
ought t o have arranged f o r a Committee of Counsel t o c o l l a b o r a t e
with t h e Standing Committee on Collections and said t h a t they would
suggest i t t o Mr. Walden, Chairman of the Standing Committee on
Collections» but I understand they f a i l e d to convey t h i s suggestion
t o Mr. Walden.
In f a c t , I was not consulted about t h e meeting of t h e
Standing Committee on C o l l e c t i o n s and did not know i t had been c a l l e d
u n t i l June 15, 1931, when I received a l e t t e r from Mr. Attobcry
which i n c i d e n t a l l y mentioned t h e f a c t t h a t a meeting of the
Committee had been c a l l e d to consider t h a t s u b j e c t on June 23,
1931.

I immediately c a l l e d Mr. Walden on the telephone and

suggested t h a t Counsel f o r some of the Federal r e s e r v e banks should
be i n v i t e d t o a t t e n d the meeting; but he said t h a t he did not f e e l
f r e e t o do so without the consent of the Committee, and t h a t the
time was too s h o r t f o r him to o b t a i n the Committee's consent and
a r r a n g e f o r the Counsel to a t t e n d .



He seemed to f e e l t h a t i t was

3 9 7 .

X-7169-d
-5not necessary f o r any of the Counsel t o a t t e n d the meeting and
s a i d t h a t the r e p o r t could "be submitted t o them f o r comment a f t e r
a t e n t a t i v e d r a f t had "been prepared.

I t o l d him t h a t I did not

b e l i e v e t h a t t h i s would produce s a t i s f a c t o r y r e s u l t s and he r e p l i e d t h a t , inasmuch a s t h e meeting would "be held a t the Federal
r e s e r v e hank of S t . Louis, the Committee could c a l l upon you f o r
any l e g a l advice which i t d e s i r e d .

A few days l a t e r he i n v i t e d

me to a t t e n d the meeting, "but t h e time was so s h o r t and I was so
busy t h a t I was unable t o a r r a n g e to do s o .
On J u l y 22, 1931, Mr. Walden sent me a copy of the
t e n t a t i v e d r a f t of the Committee's r e p o r t and i n v i t e d my comments;
but I was extremely busy a t the time and had not had an opportuni t y to send him ray comments when I received a f i n a l copy of the
r e p o r t on August 12, 1931.
On August 13, 1931, I wrote Mr. Walden a l e t t e r expressing my disagreement with c e r t a i n p o r t i o n s of t h e Committee's
r e p o r t , a f t e r a very h u r r i e d c o n s i d e r a t i o n t h e r e o f , and subsequently I sent copies t o Counsel f o r a l l F e d e r a l r e s e r v e banks
for t h e i r information.
I t h i n k t h a t , i n p r e p a r i n g i t s r e p o r t , t h e Committee
f a i l e d to a p p r e c i a t e c e r t a i n of the l e g a l d i f f i c u l t i e s and dangers
growing out of the ambiguity of the p r o v i s i o n s of Sections32 and
34 of the Treasury C i r c u l a r and a l s o

misunderstood t h e l e g a l e f f e c t

of t h e i r suggestion t h a t the Treasury Circular should show t h a t
i n "cashing" Government warrants and checks, t h e Federal r e s e r v e
banks a c t as a g e n t s f o r the banks from which they have r e c e i v e d



3 9 0

X-7169-a
-6-

such checks pursuant t o the terms of Regulation J .

The Committee

a p p a r e n t l y thought t h a t the p r o v i s i o n s of Regulation J would
give the F e d e r a l r e s e r v e banks a l l of the p r o t e c t i o n which they
need; "but I t h i n k t h i s i s a mistake.

Regulation J i s designed

t o p r o t e c t the Federal r e s e r v e hanks a g a i n s t l i a b i l i t y t o t h e
h o l d e r s of checks f o r f a i l u r e t o c o l l e c t them; whereas what we
need to o b t a i n through an amendment of the Treasury C i r c u l a r i s
a c l a r i f i c a t i o n of t h e legal r i g h t s , d u t i e s and r e s p o n s i b i l i t i e s
of the Federal r e s e r v e banks i n r e l a t i o n to t h e Treasury Department
when they "cash" Government checks and warrants drawn on the
Treasurer of the United S t a t e s .

In other words, Regulation J de-

f i n e s the d u t i e s of t h e Federal r e s e r v e banks as c o l l e c t i o n agents
but i t does not undertake to d e f i n e t h e i r d u t i e s as agents to pay
or "cash" checks f o r the Treasurer of the United S t a t e s .

In my

*

opinion, t h e l a t t e r subject i s d e a l t with very u n s a t i s f a c t o r i l y
i n t h e Treasury Circular and I d e s i r e to see i t c l a r i f i e d and
improved.
I would l i k e to see t h e Treasury C i r c u l a r amended so as
to provide t h a t , i n "cashing" government checks and w a r r a n t s , the
Federal r e s e r v e banks act as f i s c a l a g e n t s , thereby r e l i e v i n g
them of a l l l i a b i l i t y when they a c t w i t h i n the scope of t h e i r
a u t h o r i t y and w i t h ordinary c a r e .

I would a l s o l i k e to see a

p r o v i s i o n I n s e r t e d f i x i n g the time when a Government check
s h a l l be considered t o be f i n a l l y p a i d ; since I understand t h a t




-7-

x-7i69~a

399

the Treasurer assumes the r i g h t to stop payment on such
checks even a f t e r he has examined them, p e r f o r a t e d them,
and entered them on h i s hooks a s p a i d .

I also believe that

the p r o v i s i o n s of Section 34 of t h e Circular should he amended
so a s t o be e n t i r e l y c o n s i s t e n t with the t h e o r y t h a t Federal
r e s e r v e "banks a c t only a s agents i n "cashing" such checks and
t h a t they assume no l i a b i l i t y except f o r l o s s e s r e s u l t i n g from
a f a i l u r e t o e x e r c i s e ordinary care or to a c t w i t h i n the scope
of t h e i r a u t h o r i t y .

I r e a l i z e , however, t h a t I may not appre-

c i a t e some of t h a p r a c t i c a l d i f f i c u l t i e s involved i n t h e accomplishment of t h e s e o b j e c t s , and I am not w i l l i n g to commit
myself d e f i n i t e l y to any s p e c i f i c proposal u n t i l t h e s u b j e c t has
been thoroughly threshed out i n a j o i n t meeting between the
Standing Committee on C o l l e c t i o n s and the Conference of Counsel
or a Committee t h e r e o f .
While I have not yet received o f f i c i a l n o t i f i c a t i o n
of the a c t i o n t a k e n a t the r e c e n t Conference of Governors, I
understand t h a t the r e p o r t of t h e Standing Committee on Collect i o n s was r e f e r r e d t o t h e Conference of Counsel f o r c o n s i d e r a t i o n
and c o n s u l t a t i o n with the Standing Committee on C o l l e c t i o n s and
o f f i c i a l s of t h e Treasury Department, with a view of o b t a i n i n g
a c l a r i f i c a t i o n of the a p p l i c a b l e p r o v i s i o n s of t h e Treasury
Department C i r c u l a r No. 176 with r e s p e c t to t h e d u t i e s and
r e s p o n s i b i l i t i e s of t h e Federal r e s e r v e banks i n cashing Government checks and w a r r a n t s .

I b e l i e v e t h a t t h i s should load to a

s a t i s f a c t o r y s o l u t i o n of t h i s d i f f i c u l t y ; but I am a f r a i d i t would




400
X-7169-4
-8-

be d i f f i c u l t t o arrange a j o i n t meeting of t h e Conference of
Counsel f o r a l l Federal r e s e r v e banks and of t h e Standing
Committee on C o l l e c t i o n s a t which t h i s s u b j e c t could be considered with s u f f i c i e n t thoroughness t o produce s a t i s f a c t o r y r e s u l t s ,
b e f o r e some time next summer.
With apologies f o r the l e n g t h of t h i s l e t t e r and with
b e s t personal r e g a r d s , I am
C o r d i a l l y yours,

(S)

Walter Wyatt,
General Counsel.

WW gc




-4

COPY

X-7169-e

LOCKE, LOCKE, STROUD & SAUDOLPH,
F i r s t National Bank Building
DALLAS, TEXAS.
January 6, 1932.

Walter Wyatt, General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Wyatt:As requested in your telegram I am enclosing
herewith f i l e of correspondence concerning t r e a s u r y
checks involved in the f a i l u r e of the Citizens
National Bank of Brownwood, Texas.
S i n c e r e l y yours,
(Signed)

JPD: g




J . P. D r e i b e l b i s .

I

COPY

4 0 2

X-7169-e-l
December 29, 1931

Honorable G-. 0. Barnes
A s s i s t a n t Treasurer of t h e United S t a t e s
Treasury Department
Washington, D. C.
Sirs
Reference i s made to your l e t t e r of November 21, 1931, concerning
the following described checks:
Check jTo.

Date

Amount

2595778
108170

9-30-31
9-30-31

$160.83
100.00

1150388

9-28-31

617.40

Payee
Joseph Hamilton
Clara Parr Achor as
guardian of e s t a t e
of Noah A. J . Achor
Charles $. Bennett

Drawer

Symbol

A. Zaponne

70-001

H. E. Waters
J . B. Shommer

11-519
99-220

We a r e informed t h a t p l a n s a r e well under way whereby t h e C i t i z e n s
National Bank of Brownwood w i l l reopen or a new bank w i l l be organized which w i l l
succeed to i t s a f f a i r s .

E i t h e r p l a n , of course, w i l l s a t i s f a c t o r i l y dispose of

t h e s e p a r t i c u l a r items.
Notwithstanding the foregoing, we t h i n k t h a t i t i s not i n a p p r o p r i a t e a t
t h i s time to d i s c u s s the s u b j e c t g e n e r a l l y with you and express to you our views
in regard to the problems which p r e s e n t themselves to us in connection with the
general s u b j e c t .
A f u l l understanding of the p o s i t i o n of t h i s bank in the handling of
t h e s e items can b e s t be conveyed to you by p l a c i n g b e f o r e you the f u l l d e t a i l s
of t h e handling of t h e p a r t i c u l a r items l i s t e d .

Our information a s to how the

items were handled by t h e o r i g i n a l d e p o s i t a r y bank and a l s o by your o f f i c e i s
l i m i t e d to such f a c t s as a r e made known by the correspondence between t h i s bank
and the o r i g i n a l d e p o s i t a r y bank and between t h i s bank and your o f f i c e .
ever, most of t h e p e r t i n e n t f a c t s a r e d i s c l o s e d by t h a t correspondence.



How-

t

403

X-7169-e-l
Page 2
The f i r s t two of those items were a p p a r e n t l y deposited in the
C i t i z e n s n a t i o n a l Bank of Brownwood not l a t e r than October 1, 1931.
d a t e v/e f i x by the endorsement on the back of the items in question.

This
They

were r e c e i v e d by t h i s bank on October 2, 1931, in the cash l e t t e r of t h e
C i t i z e n s National Bank dated October 1, 1931, the l e t t e r t o t a l i n g $804.48.
In accordance with our usual p r a c t i c e , immediate c r e d i t was given
upon these two items.

That i s to say, t h e funds became s u b j e c t to immediate

withdrawal, and i n t h i s r e s p e c t you a r e advised t h a t a t the c l o s e of t h a t
d a y ' s b u s in e s s t h e C i t i z e n s National Bank had drawn i t s balance with us down
to t h e sum of $43.02.
The l a s t one of t h e t h r e e items mentioned above was a p p a r e n t l y dep o s i t e d in t h e C i t i z e n s n a t i o n a l Bank on October 3, 1931, such date being the
date of the b a n k ' s endorsement.

October 4 f e l l on a Sunday, and on October 5

the item was r e c e i v e d in the cash l e t t e r of t h e Citizens National Bank dated
October 3, t h a t l e t t e r t o t a l i n g $813.90.

This item was l i k e w i s e passed to the

c r e d i t of the C i t i z e n s National Bank, and the funds r e p r e s e n t e d thereby became
immediately a v a i l a b l e f o r withdrawal.
We have no knowledge as to the circumstances under which t h e items
were deposited with the C i t i z e n s National Bank other than i s r e f l e c t e d by the
correspondence with the examiner in charge.

We were advised, however, on

October 16, 1931, by Ernest Lamb, t h e examiner in charge, t h a t t h e r e c o r d s of
t h a t bank showed t h a t t h e p a r t i e s mentioned deposited the se checks f o r c r e d i t
and t h a t in each i n s t a n c e they had checked a g a i n s t t h e i r balances b e f o r e the
suspension of the ba-ik.

We assume, t h e r e f o r e , t h a t the Brownwood bank gave

immediate c r e d i t f o r the items and p e r m i t t e d the d e p o s i t o r s to withdraw funds
a g a i n s t the items, in so f a r as they d e s i r e d to do so.



Xr-7169-e-l

The f i r s t two of t h e s e items were forwarded to your o f f i c e with our
t r a n s c r i p t of October 2, and the l a s t was forwarded to your o f f i c e with our
t r a n s c r i p t of October 5.
your o f f i c e .

We havo no knowledge as to when t h e s e items reached

Our experience i s t h a t items mailed here on a given day reach

•Washington upon t h e t h i r d day t h e r e a f t e r .

At any r a t e , we assume t h a t the

f i r s t two items reached your o f f i c e not l a t e r than October 6 and t h a t the l a s t
item reached your o f f i c e not l a t e r than October 9.

These d a t e s a r e f i x e d by the

p e r f o r a t i o n s placed on t h e items in your o f f i c e .
The C i t i z e n s n a t i o n a l Bank f a i l e d to open on October 6, 1931, and we
assume t h a t i t was with knowledge of t h i s f a i l u r e t h a t the v a r i o u s payees,
themselves or through the drawers of the various items, r e q u e s t e d your o f f i c e
to d e c l i n e payment.
Under d a t e of October 7, 1931, the f i r s t two items were r e t u r n e d to
us by your o f f i c e with advice t h a t payment of t h e items was being declined
in compliance with t h e r e q u e s t s dated October 6 from the drawer and payee,
r e s p e c t i v e l y ; under d a t e of October 9, 1931, the t h i r d item was r e t u r n e d to us
by your o f f i c e with advice t h a t payment of the same was being d e c l i n e d in comp l i a n c e with the r e q u e s t dated October 7, 1931, from t h e drawer.

Being unable

to e f f e c t c o l l e c t i o n of these items from t h e examiner in charge, we r e t u r n e d
them to your o f f i c e under date of October 17, 1931.
On October 28, 1931, the items were again r e t u r n e d to us by your
office.

In t h i s l e t t e r we were advised t h a t i n the case of checks which a r e

deposited f o r c o l l e c t i o n i t i s t h e p r a c t i c e of the Comptroller of t h e Currency
to charge the d e p o s i t o r ' s account and r e t u r n the checks to him i f h i s balance
w i l l _iermit such a c t i o n , and t h a t i f the d e p o s i t o r ' s balance i s l e s s than the
amount of the check, the bank i s t h e owner of the check to t h a t e x t e n t and the
is returned
Digitizedcheck
for FRASER


to the d e p o s i t o r upon repayment of t h e d i f f e r e n c e between h i s

*

Page 4

4 0 5

X—7169—e—1

balance and the amount of the check.

I t was suggested, a l s o , t h a t our c o r -

respondents should be advised t h a t checks received in your o f f i c e a r e p e r f o r a t e d
with the date and assembled f o r i d e n t i f i c a t i o n purposes b e f o r e c l e a r a n c e or
examination, and such p e r f o r a t i o n does not s i g n i f y t h a t a chock has been p a i d .
Following the r e c e i p t of t h e items from you, we forwarded them to
the examiner in charge, together with a copy of your l e t t e r to u s .

The examiner

again r e t u r n e d them to u s , and we wrote you under d a t e of November 9, 1931, quoting in i t s e n t i r e t y the l e t t e r of the examiner which accompanied the items.
You now suggest to us t h a t as the f a i l e d b a n k ' s deposit t i c k e t
s t a t e d d e f i n i t e l y t h a t i t was a c t i n g as agent f o r the d e p o s i t o r in the c o l l e c t i o n of checks, i t i s your understanding t h a t , u n l e s s the Federal Reserve
Bank has a l t e r e d i t s p o s i t i o n or extended a d d i t i o n a l c r e d i t in r e l i a n c e or
f a i t h upon t h e supposition t h a t the deposit in f a c t belonged to t h e bank,
i t now has no r i g h t to o f f s e t proceeds of these items a g a i n s t the indebtedness owing to i t by t h e f a i l e d bank.
Leaving f o r the p r e s e n t the l e g a l , as well as the e q u i t a b l e f e a t u r e s
of the case, i t seems to us t h a t a g r e a t deal of the d i f f i c u l t y in these cases
i s brought about by a l a c k of understanding upon the p a r t of t h i s bank, as well
as i t s correspondents, a s to the circumstances under which a Government check
or warrant may be considered p a i d .
We have c a r e f u l l y considered the p r o v i s i o n s of Circular % . 176 of
the Treasury Department, p a r t i c u l a r l y with r e s p e c t to t h e payment of Government checks and w a r r a n t s , and while i t i s c l e a r therefrom t h a t such items




£ .406
Page 5

X-7169-e-l

s h a l l bo considered, p a i d only a f t e r examination by the Treasury Department,
t h e question of what a c t i o n on t h e p a r t of t h e Treasurer s h a l l amount t o
payment i s l e f t unanswered.

I t seems to us obvious t h a t a t some p o i n t i n

t h e h a n d l i n g of a p a r t i c u l a r item some s p e c i f i c or d e f i n i t e a c t on t h e p a r t
of t h e T r e a s u r e r should c o n s t i t u t e payment, b u t t h e c i r c u l a r i s e n t i r e l y
s i l e n t on t h a t p o i n t , so f a r a s we a r e a b l e to d i s c e r n .

In o t h e r 7,'ords, i t

appears to us t h a t t h e r e a l and f i n a l question i s approached from a n e g a t i v e
r a t h e r than a p o s i t i v e viewpoint.

While we a r e advised a s to what w i l l n o t

c o n s t i t u t e payment, we a r e not informed aa to what w i l l .
We do observe from t h e c i r c u l a r t h a t t h e T r e a s u r e r r e s e r v e s only the
u s u a l r i g h t of t h e drawee to examine, when r e c e i v e d , a l l Government checks and
w a r r a n t s cashed by F e d e r a l r e s e r v e banks.

We assume t h a t the p u r p o s e of the

word " u s u a l " i s to r e s e r v e to t h e T r e a s u r e r t h e same r i g h t t h a t a commercial
i n s t i t u t i o n doing, t h e same c h a r a c t e r of b u s i n e s s would have.

We a l s o note

t h a t t h e c i r c u l a r p r o v i d e s t h a t t h e T r e a s u r e r r e s e r v e s t h e r i g h t to examine
t h e items when r e c e i v e d .

From t h e language of t h e c i r c u l a r i t i s our u n d e r -

s t a n d i n g t h a t t h e T r e a s u r y Department intended t h e r e b y to r e p r e s e n t t h a t upon
r e c e i p t of a check or warrant i t would examine i t and a c t in r e g a r d to i t w i t h i n t h e same time r e q u i r e d of a commercial i n s t i t u t i o n > doing t h e same c h a r a c t e r
of b u s i n e s s , or c e r t a i n l y w i t h i n a r e a s o n a b l e and d e f i n i t e time.
We, of c o u r s e , r e a l i z e t h a t t h e p e r f o r a t i o n of t h e i t e m s , in i t s e l f ,
does not c o n s t i t u t e payment in t h e absence of o t h e r f a c t s and c i r c u m s t a n c e s .
On t h e o t h e r ha©d, i t i s a circumstance which can be taken i n t o c o n s i d e r a t i o n
with o t h e r circumstances in d e t e r m i n i n g whether or not payment h a s been made,
because, a f t e r a l l , t h e u l t i m a t e q u e s t i o n i s one of f a c t .



( 407
X-7169-e-l
Page 6
Without r e f e r e n c e to the handling of the p a r t i c u l a r items described
in t h i s l e t t e r , we do f e e l t h a t if a commercial bank had r e c e i v e d an item, c r e d i t
f o r which had a l r e a d y been passed to t h e d e p o s i t o r , held i t f o r over twenty-four
hours, and p e r f o r a t e d i t with i t s c a n c e l l a t i o n stamp, t h e r e a r e few c o u r t s t h a t
would not hold t h a t t h e item was p a i d or accepted.
Returning to the l e g a l a s p e c t s of the p a r t i c u l a r c a s e s , as evidenced
by the a v a i l a b l e f a c t s , we recognize, of course, t h e general p r o p o s i t i o n s a s s e r t e d by you in your l e t t e r of November 21, 1931, and while we agree t h a t the
r i g h t s of t h e p a r t i e s may be f i x e d by c o n t r a c t evidenced by p r o v i s i o n s incorp o r a t e d in the d e p o s i t a r y b a n k ' s deposit s l i p , we f e e l t h a t , by t h e same token,
the bank may, by i t s a c t i o n or by s p e c i a l c o n t r a c t , c r e a t e a d i f f e r e n t r e l a t i o n ship.
In th e s e p a r t i c u l a r c a s e s , so we a r e advised, the d e p o s i t a r y bank
gave immediate c r e d i t f o r the items and p e r m i t t e d the various d e p o s i t o r s to
withdraw a g a i n s t them.

That they did not withdraw a l l of the funds evidenced

by thes e items was probably because they did not d e s i r e to do so.

At any r a t e ,

i t i s our opinion t h a t the C i t i z e n s National Bank of Brownwood, by giving
immediate c r e d i t without r e s t r i c t i o n , bought the items in question and c r e a t e d
the r e l a t i o n s h i p of debtor and c r e d i t o r , r a t h e r than t h a t of p r i n c i p a l
and agent.

In t h i s connection, your a t t e n t i o n i s d i r e c t e d to the case of City

of Douglas v. Federal Heserve Bank of D a l l a s , 271 U. S. 489.
As to t h i s b a n k ' s p o s i t i o n in the t r a n s a c t i o n being a l t e r e d , i t
seems to us t h a t every time i t r e c e i v e s a Government check or warrant and
p a s s e s immediate c r e d i t to the forwarding bank, i t changes i t s p o s i t i o n .
a matter of

feet,

i t i s because we a r e c o n s t a n t l y changing our p o s i t i o n by

paying out funds and c r e a t i n g c r e d i t s s u b j e c t to immediate withdrawal t h a t



As

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Page 7

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X-7169-e-l

the question gives us so much concern.
In conclusion, we a r e hoping t h a t under the circumstances you
w i l l conclude t h a t the various payees have no claims except a s a g a i n s t the
d e p o s i t a r y bank in which they chose to deposit t h e i r f u n d s , and, accordi n g l y , we a r e herewith r e t u r n i n g the items.




Yours very t r u l y ,

Governor

409
COPY

X-7169~e-2
COPY

LETTERHEAD OF THE TREASURY DEPARTMENT, WASHINGTON
O f f i c e of the Treasurer of the United S t a t e s
In r e p l y i n g quote i n i t i a l s AWS: C
Mr. L. G. Pondrom,
A s s i s t a n t Cashier,
Federal Reserve Bank,
D a l l a s , Tex.

November 21, 1931.

REGISTERED MAIL

Sir;
Receipt of your l e t t e r of November 9 i s acknowledged, forwarding
t h r e e checks, described below, drawn on t h i s o f f i c e and r e t u r n e d when p r e sented f o r payment because of drawers' and payees' r e q u e s t s due to the f a i l ure of The C i t i z e n s National Bank of 2rov/nwood, Texas, a f t e r t h e deposit of
the checks t h e r e and b e f o r e they were p r e s e n t e d to t h i s o f f i c e f o r payment:
Check No.

Date

Amount

1,150 ,388
2,595 ,778
108 ,170

9—28— 31
9-30-31
9-30-31

$617.40
160.83
100.00

Payee
Charles E. Bennett
Joseph Hamilton
Clara Earr Achor
as Gdn. of Est.
of Noah A. J . Achor

Drawer
J . B. Schommer
A. Zappone
B. E. Waters

Symbol
99220
70001
11519

I t appears t h a t when the checks were r e t u r n e d you acknowledged r e c e i p t of them under d a t e s of October 10 and 13 and wrote t h a t you ? e r e return^ing the checks to your endorser and a s soon as you received any information
regarding them you would advise t h i s o f f i c e .
The payee of the f i r s t check above, Mr. Bennett, telegraphed and
wrote to t h i s o f f i c e on November 3, t h a t h i s check had been r e t u r n e d to him
and he r e q u e s t e d t h a t stoppage be l i f t e d . In h i s l e t t e r he s t a t e d t h a t he
had r e d e p o s i t e d the check in The F i r s t National Bank of Brownwood. On November S, he telegraphed t h a t complications had a r i s e n and r e q u e s t e d renewal
of stoppage.
The payee of the second check, Mr. Hamilton, wrote on October 16,
t h a t the examiner in charge of the f a i l e d bank r e f u s e d to r e t u r n h i s check
although t h e payee had tendered to the examiner the amount of t h e d i f f e r e n c e
between h i s bapk balance and the amount of t h i s check.
The f a i l e d b a n k ' s deposit t i c k e t s t a t e d d e f i n i t e l y t h a t i t was a c t ing a s agent f o r d e p o s i t o r s in the c o l l e c t i o n of checks.




4 1 0

Page 2

X-7169-e-S

Under d a t e of October 17, yctu r e t u r n e d the three checks to t h i s
o f f i c e with a. cooy of a l e t t e r from the examiner of the f a i l e d bank dated
October 15, in which he r e t u r n e d the checks to you and s t a t e d in -oart:
ii
we a r e not in p o s i t i o n to give you a u t h o r i t y to charge t h e account of
The Citizens National Bank of Brownwood with the checks."
On October 28, the checks were again sent to you f o r r e t u r n to the
r e c e i v e r of t h e f a i l e d bank with information as to the practice approved
by t h e Comptroller of the Currency f o r handling such checks when deposited
for collection.
With your l e t t e r of November 9, you again forwarded t h e checks and
quoted a l e t t e r from the Receiver in p a r t as follows: 11 'At the time these
checks were r e t u r n e d to me with your l e t t e r of November 2nd, i t was my thought
t h a t I could have the payees reimburse me the d i f f e r e n c e between the amount
of the checks and t h e amount standing to t h e i r c r e d i t on t h e i n d i v i d u a l
l e d g e r , which would enable me to make a debit a g a i n s t the account, which
would close each of the accounts, and you in turn d e b i t the c r e d i t balance
of The C i t i z e n s National Bank of Brownwood, Texas. Upon i n v e s t i g a t i o n , I
f i n d t h a t you have closed t h e account of The Citizens National Bank on your
books, and i t i s presumed t h e amount was a p p l i e d as a c r e d i t on the r e d i s counts of s u b j e c t bank with you, although I have never been advised to t h a t
e f f e c t . As you a r e aware, I am not in a p o s i t i o n to draw d r a f t s a g a i n s t
c r e d i t balances with o t h e r banks in order to reimburse you the amount of the
checks involved, t h e r e f o r e , I am r e t u r n i n g the checks herewith and ask t h a t
you p l e a s e acknowledge r e c e i p t of same. 1 " You also s t a t e d ; "Regarding the
balance standing to the c r e d i t of The C i t i z e n s National Bank of Brownwood
on our books, r e f e r r e d to in Mr. Lamb's l e t t e r , we advise t h a t t h i s balance
has been a p p l i e d on the indebtedness of The C i t i z e n s National Bank cf Brownwood and the s u b j e c t bank does not show any balance to i t s c r e d i t a t the
p r e s e n t time."
As understood by t h i s o f f i c e the f a i l e d bank acted as agent f o r
c o l l e c t i o n of out of town items deposited u n t i l c o l l e c t i o n was e f f e c t e d .
The agency r e l a t i o n s h i p continued u n t i l the f a i l e d bank r e c e i v e d the proceeds from i t s subagent. Where an agent makes a d e p o s i t , even in h i s own
name, of funds belonging to h i s p r i n c i p a l , the bank, although unaware of the
b e n e f i c i a l ownership of such deposit cannot o f f s e t such deposit a g a i n s t an,
indebtedness owing by such agent to the bank, where the bank has not a l t e r e d
i t s p o s i t i o n or extended any a d d i t i o n a l c r e d i t , in r e l i a n c e or f a i t h upon
the supposition t h a t the deposit in f a c t belonged to the agent, numerous
decisions s u s t a i n t h i s view.
I t thus appears t h a t the payees of these checks own t h e proceeds
except to the extent t h a t the f a i l e d bank p e r m i t t e d withdrawals a g a i n s t
the d e p o s i t s , u n l e s s the Federal Reserve Bank a f t e r the r e c e i p t of t h e s e
items changed i t s p o s i t i o n to i t s detriment. No information a s to t h i s
f e a t u r e i s contained i n the f i l e .




i

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X-7169-e-2
Page 3

The checks a r e again ruturned to you herewith and u n l e s s your
bank can he shown to have changed p o s i t i o n to i t s detriment a f t e r r e c e i p t
of the checks, i t would appear t h a t your o f f s e t t i n g them a g a i n s t an i n debtedness owing to you by the f a i l e d bank may not be upheld upon your
further consideration.
Respectfully,
G. 0. Barnes (Signed)
A s s i s t a n t Treasurer.

Inclosures.




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X-7169-0-3

COPY
C O P Y
LETTERHEAD OF THE FEDERAL RESERVE BANK OF DALLAS

November 23, 1931

Mr. G. 0. Barnes
A s s i s t a n t Treasurer of th:> United S t a t e s
Treasury Department
Washington, D. C.
SirUnder date of November 9, we forwarded you t h e
f o l l o w i n g described Treasury warrants:
number

Amount

Drawn to t h e order o f :

1,150,388
108,170
2,595,778

$617.40
100.00
160.83

Charles F. Bennett
Clara F a r r Achor
Joseph Hamilton.

We do not appear to have r e c e i v e d an acknowledgment covering these items and s h a l l a p p r e c i a t e i t if you
w i l l advise us whether they have reached your o f f i c e .
Respectfully

L. G. Pondrom
A s s i s t a n t Cashier
LGP:HH




If

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X-7169*>e-4

COPY
C O P

Y

LETTTEH3AD OP THE FEDERAL RESERVE 3AH OF DALLAS
November 9, 1931
Mr. G-. 0. Barnes
A s s i s t a n t Treasurer of the United S t a t e s
Treasury Department
Washington, D. C.
SirIn r e p l y to your l e t t e r of November 4, i n i t i a l e d "AWS-C,"
we r e t u r n T r e a s u r e r ' s check Mo. 1,150,383, f o r $617.40, drawn to
the order of Charles F. Bennett, r e f e r r e d to t h e r e i n , t o g e t h e r with
warrant f o r $100, No. 108,170, drawn to t h e order of Clara Farr Achor,
Guardian of the E s t a t e of IToah A. J . Achor, and warrant No. 2,595,778,
f o r $160,83, drawn to the order of Joseph Hamilton, which checks were
mentioned in T r e a s u r e r ' s l e t t e r of October 28.
Our a c t i o n becomes n e c e s s ary i n view of l e t t e r today r e ceived from Mr. Ernest Lamb, n a t i o n a l Bank Examiner in charge of the
C i t i z e n s National Bank of Brownwood, r e t u r n i n g these warrants to u s ,
which we quote below;
"With f u r t h e r r e f e r e n c e to the t h r e e checks drawn on the
Treasurer of the United S t a t e s f o r $100, $160.83, and $617.40,
payable to Clara Pharr Achor, Joseph Hamilton, and Charles F.
Bennett, r e s p e c t i v e l y , about which t h e r e has been so much cont r o v e r s y , I am r e t u r n i n g the checks herewith.
"As you were p r e v i o u s l y advised the payees of these checks
deposited the items in The Citizens National Bank p r i o r to i t s
suspension, r e c e i v e d immediate c r e d i t f o r the items a g a i n s t which
c r e d i t each payee had checked p r i o r to t h e suspension of b u s i n e s s .
At the time t h e s e checks were returned to me with your l e t t e r of
November 2nd, i t was my thought t h a t I could have the payees re?imburse me t h e d i f f e r e n c e between the amount of the checks and
the amount standing to t h e i r c r e d i t on the individual l e d g e r ,
which would enable me to make a d e b i t a g a i n s t the account, which
would close each of the accounts, and you in t u r n d e b i t t h e c r e d i t
balance of The C i t i z e n s National 3ank of Brownwood, Texas.
"Upon i n v e s t i g a t i o n , I f i n d that you have closed t h e account
of The C i t i z e n s National Bank on your books, and i t i s presumed
the amount was a p p l i e d a s a c r e d i t on the r e d i s c o u n t s of s u b j e c t
bank with you, although I have never been advised to t h a t e f f e c t .




Xs7169»e=4

Page 2
i'Afc you ard atfare, 1 am not iti i p o s i t i o n tb diraw d r a f t s
a g a i n s t c r e d i t "balances w i t h other banks in order to reimburse
you t h e amount of t h e checks involved, t h e r e f o r e , I am r e t u r n i n g the checks herewith and a s k . t h a t you p l e a s e acknowledge
r e c e i p t of same."
Regarding the balance standing to the c r e d i t of t h e C i t i z e n s
National Bank of Brottnwood on our books, r e f e r r e d to i n Mr. Lamb's
l e t t e r , we advise t h a t t h i s balance has been a p p l i e d on the indebtedness of the C i t i z e n s National Bank of Brownwood and the s u b j e c t bank
does not show any balance to i t s c r e d i t a t the p r e s e n t time.
We s h a l l await your f u r t h e r advice in connection with t h e s e
warrants and w i l l thank you to acknowledge t h e i r r e c e i p t .
Respectfully

L. G. Pondrom
A s s i s t a n t Cashier
LGP:HH
Attachments




fr

X-7169-e-5

COP
C

.6 ^

Y

LBTI5REEAD OF THE TREASURY UBPASTCTfS, fASHIKGTOK

November 4, 1931
O f f i c e of Treasurer of the United S t a t e s
In r e p l y i n g quote i n i t i a l s A7S-C

, Cashier,
Federal Reserve Bank,
D a l l a s , Texas.
Sir;
Reference i s made to o f f i c e l e t t e r dated October 9,
1931, r e l a t i v e to check ITo. 115,388, dated September 28, 1931,
drawn on t h i s o f f i c e to the order of Charles F. Bennett f o r
$617.40 by J . B. Schommer, symbol 99-220, payment of which
check was d e c l i n e d when p r e s e n t e d f o r the reason t h a t the C i t i z e n s
Hational Bank of Brownwood, Texas, in which the item had 'been dep o s i t e d , subsequently closed.
Inasmuch as the check was r e t u r n e d by the r e c e i v e r of
t h e f a i l e d bank to t h e payee and as you do not appear to have
entered c r e d i t in the T r e a s u r e r ' s account f o r t h i s item, i t w i l l be
g r e a t l y a p p r e c i a t e d i f you w i l l communicate with your i n d o r s e r with
a view of o b t a i n i n g t h e amount involved.




4 1 5

Respectfully,

G. 0 . Barnes (Signed)
Assistant Treasurer.

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4 1 6

X-7169-8-6

COPY

C

0

E

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LSttSRHklAD Of TS6 FEDEELAL RESERVE BANK OP DALLAS

November 9, 1931

Mr. Ernest Lamb
National Bank Examiner
C i t i z e n s National Bank
Brownwood, Texas.
Dear Mr. Lamb;
This w i l l acknowledge r e c e i p t of your l e t t e r of November 6, enclosing to us the following described Treasury
warrants:
Number
1,150,388
2,595,778
108,170

Name of Payee

Amount

Charles F. Bennett
Joseph Hamilton
Clara Farr Achor a s Guardian of
the E s t a t e of Noah A. J . Achor

$617.40
160.83
100.00

We a r e quoting your l e t t e r to t h e Treasurer of the
United S t a t e s today and s h a l l be p l e a s e d to advise you of any
f u r t h e r developments t h a t might occur i n connection with t h e s e
checks.
Yours very t r u l y

L. G-. Pondrom
A s s i s t a n t Cashier
LOP: EE




C O P

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X-7169~e~7
t , 0 ' P

Y

LETTERHEAD OF THE CITIZENS HATIOMAL BAlS Of BEOlOTOOD
November 6, 1931,

Federal Reserve Bank,
D a l l a s , Texas.
Gentlemen;
With f u r t h e r r e f e r e n c e to the t h r e e checks drawn on t h e Treasurer
of the United S t a t e s f o r $100.00, $160,83 and $617.40, payable to Clara Pharr
Achor, Joseph Hamilton and Charles F. Bennett r e s p e c t i v e l y , about which t h e r e
has been so much controversy, I am r e t u r n i n g the checks h e r e w i t h .
As you were p r e v i o u s l y advised the payees of these checks deposited
the items in The C i t i z e n s n a t i o n a l Bank p r i o r to i t s suspension, received
immediate c r e d i t f o r the items a g a i n s t which c r e d i t each payee had checked
p r i o r to t h e suspension of b u s i n e s s . At the time the se checks were r e t u r n e d
to me with your l e t t e r of November 2nd, i t was my thought t h a t I could have
the payees reimburse me the d i f f e r e n c e between the amount of the ,checks and
the amount standing to t h e i r c r e d i t on the individual ledger which would
enable me to make a d e b i t a g a i n s t the account, which would c l o s e each of
t h e accounts, and you in turn d e b i t the c r e d i t balance of The C i t i z e n s
National Bank of Brownwood, Texas.
Upon i n v e s t i g a t i o n , I f i n d t h a t you have closed t h e account of
The Citizens National Bank on your books and i t i s presumed the amount
was a p p l i e d a s a c r e d i t on the r e d i s c o u n t s of subject bank with you,
although I have never been advised to t h a t e f f e c t .
As you a r e aware, I am not in a p o s i t i o n to draw d r a f t s a g a i n s t
c r e d i t balances with o t h e r banks in order to reimburse you the amount of
the checks involved, t h e r e f o r e , I am r e t u r n i n g the checks herewith and
ask t h a t you p l e a s e acknowledge r e c e i p t of same.




R e s p e c t f u l l y yours,

Ernest Lamb, (Signed)
National Bank Examiner.

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X-7169-©r,§

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LETTERHEAD OF THE FEDERAL RESERVE 3AM OF DALLAS

November 2, 1931

Mr. Ernest Lamb,
National Bank Examiner,
C i t i z e n s National Bank,
Brownwood, Texas.
Dear Mr. Lamb:
We a r e e n c l o s i n g the three checks drawn on the Treasurer
of the United S t a t e s f o r $100,00. $160.83 and $617.40, which you f o r warded to us i n your l e t t e r of October 16th a f t e r having r e f u s e d to
accept t h e i r r e t u r n . We a r e a l s o enclosing copy of a l e t t e r from the
Treasurer regarding the checks t h a t i s s e l f - e x p l a n a t o r y .
The check drawn to the order of Clara F a r r Achor ag. Gdn. of
E s t . of Noah A. J . Achor should "be endorsed e x a c t l y a s drawn "before
i t i s a g a i n p r e s e n t e d f o r payment.
P l e a s e acknowledge r e c e i p t of the check and advise us r e garding the m a t t e r .
Yours very t r u l y ,

L. 6. Pondrom,
A s s i s t a n t Cashier.
LGP/S
s




t 419
X-7169-e-9

C O P Y

LETTERHEAD OF THE EEEER&L KBSBBVB BANK Of nAT.TAR

November 5, 1931

Mr. Joseph Hamilton
P , 0 . Box 813
Brownwood, Texas
Dear S i r :
This w i l l acknowledge r e c e i p t of your l e t t e r of
November 4, e n c l o s i n g United S t a t e s Treasury check Mo.
2595778, d a t e d September 30, d r a m to your order f o r $160.83.
We observe t h a t you would have us cancel our e n dorsement in order t h a t f u r t h e r n e g o t i a t i o n of the check may
be accomplished. This i s t o advise t h a t c e r t a i n m a t t e r s i n
connection w i t h t h i s p a r t i c u l a r warrant a r e s t i l l under a d j u s t ment w i t h Mr. Ernest Iamb, Examiner i n Charge of t h e C i t i z e n s
n a t i o n a l Bank of Brownwood, and we a r e not a t the p r e s e n t time
a t l i b e r t y to cancel our endorsement. We have r e t u r n e d the
warrant today t o Mr. Lamb and suggest t h a t you c a l l upon him,
and he w i l l be g l a d t o f u l l y explain the m a t t e r .
Yours very t r u l y

I . 0 . Pondrom
A s s i s t a n t Cashier
LGP:HH




t

4 2 0

X-7169-e-10

C O P Y

LETTERHEAD OF THE FEDERAL RESERVE BANK OF TIAT.T.AR
November 5, 1931

t

Mr. Ernest Lamb
Examiner in Charge
C i t i z e n s National Bank
Brownwood, Texas
Dear Mr. Lamb:
F u r t h e r i n g our telephone conversation r e g a r d i n g c e r t a i n Government w a r r a n t s , one of these checks f o r $160.83 was
received by u s today d i r e c t from the payee, Joseph Hamilton.
We a r e w r i t i n g Mr. Hamilton t h a t the warrant has been r e t u r n e d
to you and t h a t he should g e t i n touch with you with f u r t h e r
r e f e r e n c e t o i t s payment.
We might s t a t e t h a t he has asked us to cancel our endorsement i n order t h a t the warrant may "be n e g o t i a t e d . This,
of course, we cannot do u n t i l the question now in controversy
is settled.
P l e a s e acknowledge r e c e i p t of the e n c l o s u r e .
Yours very t r u l y

L. G. Pondrom
A s s i s t a n t Cashier
LGSPsHH
Attachment




421
X-.7169-.eall

C O P Y

Post O f f i c e Box 813,
Brownwood, Texas,
November 4, 1931.

Federal Reserve Bank of D a l l a s ,
D a l l a s , Texas.
Gentlemen:
I am enclosing check No. 3,595,778 dated September
30, 1931, f o r $160.83, drawn on the Treasurer of the United
S t a t e s to the order of the undersigned by A. Zappone, symbol
70-001.

Payment on t h i s check has been suspended.
In accordance with i n s t r u c t i o n s from the Treasurer

of the United S t a t e s to have a l l endorsements cancelled b e f o r e
r e d e p o s i t i n g t h i s item you a r e kindly requested t o cancel your
endorsement thereon and r e t u r n to undersigned.




Yours very t r u l y

Joseph Hamilton

(Signed)

4 2 2

X-7169-Q-12
C O P Y
IJCTTERHEAD 0 1 THE FEDERAL RESERVE BANK OF DALLAS
November 4 , 1931

Mr. Dean Bippetoe, A s s i s t a n t Cashier
F i r s t N a t i o n a l Bank
Brownwood, Texas
Dear Mr. Bippetoe:
We r e f e r to your l e t t e r of November 3, e n c l o s i n g Treasu r y warrant No. 1150388, drawn to the order of Charles F. Bennett
f o r $617,40, r e q u e s t i n g t h a t , i f i n o r d e r , the amount be c r e d i t e d
to your a c c o u n t .
As advised you over the telephone today, t h i s w a r r a n t
i s i n c o n t r o v e r s y , having "been returned to us "by the Treasurer of
the United S t a t e s f o r reclamation through the Examiner i n Charge
of the C i t i z e n s National Bank of Brownwood on account of the f a c t
t h a t the payeee had requested t h a t payment he stopped on i t .
We r e t u r n e d the warrant to Mr. Lamb, Examiner i n Charge
of the C i t i z e n s National Bank a t Brownwood f o r reimbursement, and
t h i s m a t t e r i s s t i l l r e c e i v i n g Mr. Lamb's c o n s i d e r a t i o n . Theref o r e we r e t u r n the warrant to you and a s k t h a t you g e t i n touch
with Mr. TjmWh so t h a t he may he p r e s e n t when you d i s c u s s the matt e r w i t h your d e p o s i t o r , who we understand i s the payee, Charles
F. B e n n e t t .
Kindly f a v o r us "by acknowledging r e c e i p t of the e n c l o s u r e .
Yours very t r u l y

L. G-. Pondrom
A s s i s t a n t Cashier
LGPjHH
Attachment
cc to Mr. Ernest Lamb
N a t i o n a l Bank Examiner
c/o C i t i z e n s National Bank
Brownwood, Texas




4 2 3

X-7169-e-13
0

6 P

Y

IS1TBEHELAD OF THE FIRST NATIONAL BASK, BROWNWOOD, TEXAS
November 3, 1931.

Federal Reserve Bank i n D a l l a s ,
Dallas, Texas.
Gentlemen:
We enclose h e r e i n Adjusted Service C e r t i f i c a t e loan check
by J . 3 . Schommer, Disbursing Clerk on the Treasurer of t h e United
S t a t e s , d a t e d September 28, 1931, and b e i n g numbered 1,150,388, i n
the sum of $617.40, payable to the order of Charles F . Bennett, 109
E. Chandler, Brownwood, Texas.
P r i o r endorsements on t h i s item i n d i c a t e s t h a t i t was d e p o s i t e d i n the C i t i z e n s National Bank of t h i s c i t y on October 3rd,
by payee, b u t on account of the closing of t h a t bank, payment was
requested to be stopped, and the item has consequently been returned
to the payee, who has today wired the Treasurer of the United S t a t e s
a t Washington, a s f o l l o w s :
" L i f t stop payment a g a i n s t check #1150388 J . B. Schooner
d i s b u r s i n g c l e r k to Charles F. Bennett $617.40, a d j u s t e d
s e r v i c e c e r t i f i c a t e loan and confix® your a c t i o n to
F i r s t National Bank, Brownwood, since check has now
been r e t u r n e d to me by o t h e r bank. 11

*

I f i t i s now in order to pay t h i s check, we w i l l thank
you to c r e d i t our account and advise us when f i n a l l y p a i d , i n order
t h a t we may pay the funds over to the endorser of the check only when
we have r e c e i v e d f i n a l payment.
Yours very t r u l y ,
Dean Bippetoe
(Signed)
A s s i s t a n t Cashier.
Y-r




X-7169-S-14
6

0

F

Y

EBTTBEHEib Off THE TBEASUBY DEPARTMENT, WASHINGTON
O f f i c e of
Treasurer of the United S t a t e s
In r e p l y i n g quote i n i t i a l s AWS:C
Cashier,
Federal Reserve Bank,
Dallas, lex.

October 28, 1931.

#

REGISTERED MAIL

Sir:

Herewith a r e r e t u r n e d checks received with your l e t t e r of
October 17, wi vh inclosure from Ernest Iamb, n a t i o n a l Bank Examiner,
Brownwood, Texas, a s f o l l o w s :
Check Ho.

Symbol

Amoint

108,170

11519

$100.00

1,150,388
2,595,778

99230
70001

617.40
160.83

Payee
Clara l a r r Achor a s Gdn. of
E s t . of IToah A . J . Achor
Charles F. Bennett
Joseph Hamilton

In case of checks which were deposited f o r c o l l e c t i o n i t
i s the p r a c t i c e of the Comptroller of the Currency to charge the d e p o s i t o r ' s account and r e t u r n the checks to him i f h i s balance w i l l
permit such a c t i o n . I f t h e d e p o s i t o r ' s balance i s l e s s than the
amount of the check the bank i s owner of t h e check to t h a t e x t e n t ,
and the check i s r e t u r n e d to the d e p o s i t o r upon repayment of the d i f ference between h i s balance and the amount of the check.
P l e a s e r e t u r n the checks to the r e p r e s e n t a t i v e of the
Citizens N a t i o n a l Bank, Brownwood, Texas, and advise t h i s o f f i c e in
d e t a i l a s to h i s p o s i t i o n i f you a r e not reimbursed w i t h i n a reasonable time.
Your correspondent should be advised t h a t checks received
i n t h i s o f f i c e a r e p e r f o r a t e d with a d a t e and symbols f o r i d e n t i f i c a t i o n purposes b e f o r e clearance or examination and such p e r f o r a t i o n
does not s i g n i f y t h a t a check has been p a i d .
Respectfully,
W. 0 . Woods
Treasurer.
Inclosures.



(Signed)

4 2 5

X-7169-e~15

O O P

Y

LETTERHEAD OF THE PEBERAL RESERVE BANK OP DALLAS

October 17, 1931.

Hon. W. 0 . Woods,
Treasurer of the United S t a t e s ,
Washington, 3D. C.
Sirs
Reference i s made to your l e t t e r s of October 7 t h and
October 9th enclosing checks a s described below:
Check No.
108,170
1,150,388
2,595,778

Payee
Clara P a r r Achor, a s Guardian
of E s t a t e of Noah A. J . Achor
Charles P. Bennett
Joseph Hamilton

Amount
• $100.00
617.40
160.83

The m a t t e r of o b t a i n i n g refund to cover the checks was
r e f e r r e d to the N a t i o n a l Bank Examiner in charge of the C i t i z e n s
National Bank, Brownwood, Texas, and we a r e today i n r e c e i p t of
a l e t t e r from him, copy of which i s a t t a c h e d .
The checks a r e enclosed f o r your d i s p o s i t i o n and we ask
t h a t you p l e a s e advise us i f we can be of f u r t h e r a s s i s t a n c e .
Respectfully,

L. G>. Pondrom,
A s s i s t a n t Cashier,
LGP/S
8




4 2 6

X-7169~e~16
C O P Y

LETTEHHEJU) Of THE FEDERAL RESERVE BANK OF DALLAS

October 13, 1931.

Hon, W. 0 . Woods,
Treasurer of the United S t a t e s ,
Washington, D. C.
Sir:
Receipt i s acknowledged of your l e t t e r of October
9th, 1931, i n i t i a l s AWS-C, enclosing check No. 1,150,388, drawn
to the o r d e r of Charles F, Bennett f o r $617,40, on which payment
has been stopped because the bank in which i t was d e p o s i t e d has
closed*
We a r e r e t u r n i n g the check to our endorser and a s
soon a s we r e c e i v e any information regarding i t you w i l l be a d vised.
Respectfully,

L. 0. Fondrom,
A s s i s t a n t Cashier.
LGP/S
s




X-7169-e-l?
0

0

P

Y

LETTERHEAD OP THE TREASURY DEPARTMENT, WASHINGTON
O f f i c e of
Treasurer of the United S t a t e s
In r e p l y i n g quote i n i t i a l s AWS-C
October 9, 1931

Cashier,
Federal Reserve Bank,
D a l l a s , Tex.

REGISTERED MAIL

Sir:
There i s r e t u r n e d herewith check No. 1,150,388 dated
September 28, 1931, drawn on t h i s o f f i c e to the order of Charles
3P. Bennett, f o r $617.40, by J . B. Schommer, symbol No, 99230,
which was l i s t b d i n your t r a n s c r i p t of the T r e a s u r e r ' s account
dated October 5, 1931. Payment i s declined a t t h i s time i n comp l i a n c e w i t h r e q u e s t dated October 7, 1931, from drawer, who asked
t h a t payment be stopped because the bank i n which the check was
deposited had become i n s o l v e n t .
P l e a s e r e t u r n the check through the i n d o r s e r s to the
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to t h e payee i f the c i r cumstances warrant t h i s a c t i o n . Returned Check Credit Ticket No.
72194 i s i n c l o s e d , with which to e n t e r c r e d i t i n the T r e a s u r e r ' s
account.
Respectfully,
W. 0 . WOODS
Treasurer.

(Signed)

Countersigned:
A s s t . Chief, Accounting D i v i s i o n .
REBiNR
AC-152




4

4 2 7

X-7169-e-18

d6f i
LETTEBHEAD OF THE FEDERAL HE SERVE BANK OF DALLAS

October 10, 1931.

Hon. W. 0 . Woods,
Treasurer of the United S t a t e s ,
Washington, E. C.
Sir:
Receipt i s acknowledged of your l e t t e r of October
7th, i n i t i a l s AWS-C, e n c l o s i n g check No. 2,595,778, drawn to the
order of Joseph Hamilton f o r $360.83, on which payment has been
stopped "because the bank in which i t was deposited has c l o s e d .
We a r e r e t u r n i n g the check to our endorser and a s soon
a s we r e c e i v e any information regarding i t you w i l l be a d v i s e d .
Respectfully,

L. G-. Pondrom,
A s s i s t a n t Cashier.
LGEP/S
s




C O P Y

EETIEEHEAD OF THE ZEDBEAL RESERVE BAM 07 DALLAS

October 10, 1931.

Hon. W. 0 . Woods,
Treasurer of the United S t a t e s ,
Washington, T. C.
Sir:
Receipt i s acknowledged of your l e t t e r of October
7th, i n i t i a l s AWS-C, enclosing check lio, 108,170, drawn to t h e
order of Clara P a r r Achor a s Gdn. of E s t . of Noah A. J . Achor
f o r $100.00, on which payment has been stopped because the bank
i n which i t was deposited has closed*
We a r e r e t u r n i n g the check to our endorser and a s
soon a s we r e c e i v e any information regarding i t you w i l l be a d vised.
Respectfully,.

1 . 6 . Pondrom,
A s s i s t a n t Cashier,
LGP S
s




4 3 0

X-7169-e-20
0

0

F

Y

LEiTEBEEAD OP TREASURY DEPARTMENT, WASHINGTON

October 7, 1931
O f f i c e of
Treasurer of t h e United S t a t e s
In r e p l y i n g quote i n i t i a l s AWS-C
Cashier,
Federal Reserva Bank,
D a l l a s , Texas,

REGISTERED MAIL

Sir:

There i s r e t u r n e d herewith check No. 2,595.778, dated
September 30, 1931, drawn on t h i s o f f i c e t o the order of Joseph
Hamilton, f o r $160#83, "by A. Zappone, symbol No. 70001, which was
l i s t e d i n your t r a n s c r i p t of the T r e a s u r e r ' s account dated October
2, 1931. Payment i s d e c l i n e d a t t h i s time in compliance w i t h r e quest dated October 6, 1931, from the payee, who asked t h a t payment he stopped because the bank in which the check was d e p o s i t e d
had become i n s o l v e n t .
P l e a s e r e t u r n the check through the i n d o r s e r s to the
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to the payee i f the c i r cumstances warrant t h i s a c t i o n . Heturned Check Credit Ticket No.
47030 i s i n c l o s e d , with which to e n t e r c r e d i t in the T r e a s u r e r ' s
account.
Respectfully,
W. 0 . WOODS
Treasurer.
Countersigned}
A s s t . C h i e f , Accounting D i v i s i o n .
F:BB
A0-152




4 3 1

X-7169~e^21
C .0

P

Y

LETTERHEAD t)f THE TREASURY DEPARTMENT, WASHINGTON
O f f i c e of
Treasurer of the United S t a t e s
In r e p l y i n g quote i n i t i a l s AWS-C
October 7, 1931.
Cashier,
Federal Reserve Bank,
Dallas, Tex.

REGISTERED MAIL

Sir:

There i s r e t u r n e d herewith check No. 108,170, d a t e d
September' 30, 1931, drawn on t h i s o f f i c e to the order of Clara
Earr Achor a s Gdn. of E s t . of Noah A. J . Achor, f o r $100.00,
by R. E. Waters, symbol No. 11-519, which was l i s t e n i n your
t r a n s c r i p t of the Treasurer 1 s account dated October 2, 1931.
Payment i s d e c l i n e d a t t h i s time in compliance with r e q u e s t dated
October 6, from the drawer, who asked t h a t payment be stopped b e cause the bank i n which the check was deposited had become i n s o l vent.
P l e a s e r e t u r n the check through the i n d o r s e r s to the
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to the payee i f the
circumstances warrant t h i s a c t i o n . Returned Check Credit Ticket
No. 47029 i s i n c l o s e d , w i t h which t o e n t e r c r e d i t i n t h e T r e a s u r e r ' s
account.
Respectfully,
W. 0 . WOODS
Treasurer.
Countersigned:
A s s t . Chief, Accounting D i v i s i o n .
AC-152
KMD:REL




The check should be indorsed e x a c t l y a s drawnClara Earr Achor a s Gdn. of E s t . of Noah A. J .
Achor, b e f o r e i t i s again p r e s e n t e d f o r payment.

X-7169-S-22
4 3 2
C..P.

*

1

LETTERHEAD o r THE IBERAl BEE3RVE BANK 07 DALLAS
October 10, 1931.

Examiner i n Charge,
Citizens N a t i o n a l Bank,
Brownwood, Texas,
Dear S i r :
There i s r e t u r n e d herewith check No, 108,170, drawn
to the order of Clara Farr Achor a s Gdn. of E s t . of Ivoah, A. J .
Achor, f o r $100.00, which h e a r s the endorsement of -he C i t i z e n s
National Bank, Brownwood, Texas, of October 1, 1931,,
This check has been returned to u s "by the Treasury Department with a l e t t e r which, i n p a r t , reads a s f o l l o w s ;
"Payment i s d e c l i n e d a t t h i s time i n compliance w i t h
r e q u e s t d a t e d October 6, from the drawer, who asked t h a t
payment be stopped because the bank i n which the check was
d e p o s i t e d had become i n s o l v e n t .
"Please r e t u r n the check through the i n d o r s e r s to the
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to the payee i f the
circumstances warrant t h i s a c t i o n . "
Under the circumstances p l e a s e a d v i s e us i f i t w i l l be i n
order f o r u s to charge the account of the C i t i z e n s National Bank,
Brownwood, Texas, to c o v e r .
Yours very t r u l y ,

L., Q-. Pondrom,
A s s i s t a n t Cashier.
LGP/S
s




X-7169~e«23
U

p

i

LStlEfiHEAD OT THE FEUEEAL RESERVE BAIJK OF DALLAS

October 13, 1931*

Examiner i n -Charge,
Citizens N a t i o n a l Bank,
Brownwood, Texas.
Dear S i r :
There i s r e t u r n e d herewith check No. 1,150,388, drawn
to the o r d e r of Charles I . Bennett f o r $617,40, which b e a r s the
endorsement of the C i t i z e n s National Bank, Brownwood, Texas, of
October 3, 1931.
This check has been returned to u s by the Treasury Department with a l e t t e r which, in p a r t , reads as f o l l o w s :
"Payment i s d e c l i n e d a t t h i s time in compliance w i t h
r e q u e s t dated October 7, 1931, from drawer, who asked t h a t
payment be stopped because the bank i n which the check was
d e p o s i t e d had become i n s o l v e n t ,
'•Please r e t u r n the check through the i n d o r s e r s to t h e
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to the payee i f the
circumstances warrant t h i s a c t i o n , "
Under the circumstances p l e a s e a d v i s e us i f i t w i l l be i n
order f o r us to charge the account of the C i t i z e n s N a t i o n a l Bank,
Brownwood, Texas, to cover.
Yours very t r u l y ,

L, Gr. Pondrom,
A s s i s t a n t Cashier.
LGP/S
s




4.33

4 3 4

X-7169-e~24
6- 6

F

Y

LETTERHEAD Of THE INDERAL RESERVE BANK OF DALLAS
October 10, 1931.

Examiner i n Charge,
C i t i z e n s N a t i o n a l Bank,
Brownwood, Texas.
Dear S i r s
There i s r e t u r n e d herewith check No. 2,595,778, drawn
to t h e o r d e r of Joseph Hamilton f o r $160.83, which b e a r s the
endorsement of the C i t i z e n s National Bank, Brownwood, Texas,
of October 1, 1931.
This check has been r e t u r n e d to u s by the Treasury Department w i t h a l e t t e r which, i n p a r t , reads a s f o l l o w s :
"Payment i s d e c l i n e d a t t h i s time i n compliance w i t h
r e q u e s t d a t e d October 6, 1931, from the payee, who asked
t h a t payment be stopped because the bank i n tzhich the check
was d e p o s i t e d had become i n s o l v e n t ,
"Please r e t u r n the check through the i n d o r s e r s to the
r e c e i v e r of the f a i l e d bank f o r d e l i v e r y to t h e payee i f the
circumstances warrant t h i s a c t i o n . 1 1
Under the circumstances p l e a s e a d v i s e u s i f i t w i l l be i n
order f o r u s t o charge the account of the C i t i z e n s N a t i o n a l Bank,
Brownwood, Texas, to cover.
Yours very t r u l y ,

L. G> Pondrom,
Assistant Cashier.
LGPJS
s




X-7169-e-25

4 3 5

A.,,JO P . I
LETTERHEAD OP teE CITIZENS NATIONAL BANK OP BBOWOTOOD, BBGWNWOOD, TEXAS
October 16* 1931.

Pederal Reserve Bank,
Dallas, Texas.
Gentlemen:
Receipt i s acknowledged of your l e t t e r s enclosing Government
checks payable t o :
Clara Parr Achor, as Guardian of E s t a t e of
Noah A* J . Achor, f o r ——————————
Charles P. Bennett - - - - - - - Joseph Hamilton - - - - - - - - - - - - -

$100,00
617,40
160.83

which appear to have been returned to you on account of payment being d e c l i n e d in compliance with request dated October 6th from the drawers, who
asked t h a t payment be stopped because the bank in which the checks were dep o s i t e d had become i n s o l v e n t .
The records of t h i s bank show t h a t the p a r t i e s mentioned d e p o s i t e d these checks f o r c r e d i t and had checked a g a i n s t t h e i r balances
before the bank suspended. In a d d i t i o n t h e r e t o each and a l l of the
checks show to be punctured p a i d by the Treasury Department and, r e p l y i n g
to your question in the l a s t paragraph of your l e t t e r s , you are advised
t h a t we take the p o s i t i o n t h a t , based upon a l l the circumstances in the
case, we a r e not in p o s i t i o n to give you a u t h o r i t y to charge the account
of The C i t i z e n s National Bank of Brownwood with the checks. Therefore,
we a r e r e t u r n i n g the checks to you r e q u e s t i n g t h a t they be r e t u r n e d through
the r e g u l a r order with any n o t a t i o n you may deem proper to make.




R e s p e c t f u l l y yours,
Ernest Lamb
(Signed)
National Bank Examiner.

436
Copy

X-7169-f
June 2, 1932.

Mr, J . S. Walden, J r . , Chairman,
Standing Committee on C o l l e c t i o n s ,
Federal Reserve Bank of Richmond,
Richmond, V i r g i n i a .
Dear Mr. Walden:
I have received and g r e a t l y a p p r e c i a t e your kind
l e t t e r of June 1, 1932, regarding the m a t t e r of c a l l i n g a
meeting of Counsel f o r the Federal Reserve Banks with t h e
Standing Committee on C o l l e c t i o n s to consider the m a t t e r of
"cashing" government checks and warrants by Federal Reserve
Banks under the terms of Treasury Department C i r c u l a r No. 176.
I a p p r e c i a t e the d i f f i c u l t i e s of o b t a i n i n g f u l l a t t e n d ance a t a conference of t h i s kind during the summer months, and
I p e r s o n a l l y would p r e f e r to hold the conference in the l a t e
summer or e a r l y f a l l ; but Counsel f o r one of the Federal Reserve
"RariVp has a l r e a d y c a l l e d my a t t e n t i o n to the f a c t t h a t many of the
c o u r t s which take r e c e s s e s during the summer resume t h e i r terms
during the month of September, and t h i s makes the months of
September and October u n u s u a l l y busy months f o r some of t h e
Counsel.

I t Lay be n e c e s s a r y , t h e r e f o r e , t o hold the c o n f e r -

ence not l a t e r than August, in order t o enable Counsel to r e t u r n
home i n time to a t t e n d to t h e i r l i t i g a t i o n .

In the circum-

s t a n c e s , I s h a l l ask Counsel f o r each of the Federal Reserve
Banks to a d v i s e me when i t would be most convenient to him to




X-7169-f
Mr, J . S» Walden, J r .

437

2

a t t e n d such a conference and 1 suggest t h a t you make s i m i l a r
i n q u i r i e s of the members of your Committee and advise me of the
results.

This i s the only way t h a t I know of whereby we can

a r r i v e a t a d a t e convenient to a m a j o r i t y of a l l those concerned.
I wish you would a l s o be giving some thought t o the
question of procedure.

Undoubtedly, i t would be a d v i s a b l e f o r the

Counsel and t h e members of the Standing Committee on C o l l e c t i o n s
to agree upon a d e f i n i t e p o s i t i o n b e f o r e t a k i n g the m a t t e r up with
the o f f i c i a l s of the Treasury Department; but the o f f i c i a l s of
the Treasury Department may d e s i r e to have some time to study the
recommendations of the Counsel and the Standing Committee on
c o l l e c t i o n s b e f o r e they p a r t i c i p a t e in a c o n f e r e n c e .

I t may be

necessary to hold two conferences on the s u b j e c t ; but I t h i n k t h i s
should be avoided i f p o s s i b l e .

I f a second conference i s found to

be a b s o l u t e l y n e c e s s a r y , i t would seem to me t h a t i t need not be
a t t e n d e d by a l l of the Counsel and a l l of the members of the Standing
Committee on C o l l e c t i o n s , but t h a t the views of the Federal Reserve
Banks could be p r e s e n t e d by a small committee appointed f o r t h a t
purpose.

Apparently the Governors' Conference does not d e s i r e

f u r t h e r recommendations to be submitted to them b u t expects the
Counsel and the Standing Committee on C o l l e c t i o n s to take the m a t t e r
up with the o f f i c i a l s of the Treasury Department, agree upon the
necessary changes i n Treasury Department C i r c u l a r 176, and r e p o r t




X-7169-f
Mr. J . S. Walddn,
the r e s u l t s .

tfrs

3

I have no f i x e d views about the m a t t e r , however,

and I s h a l l be very g l a d to receive any suggestions which you or
any of the o t h e r i n t e r e s t e d p a r t i e s may have to o f f e r .
I have received t h e e i g h t copies of the r e p o r t of the
Standing Committee on C o l l e c t i o n s which you sent me and have
obtained one a d d i t i o n a l copy from a member of the Board.

I am,

t h e r e f o r e , sending copies t o Counsel f o r a l l the Federal Reserve
Banks except Chicago and D a l l a s , who I understand from your
l e t t e r a l r e a d y have c o p i e s , and Mr, Wallace, who can o b t a i n a
copy from you.
With k i n d e s t p e r s o n a l regards and a l l b e s t wishes,
I am
Very t r u l y yours,

WW/gc




Walter Wyatt,
General Counsel.

438

4 3 9

.QoftV

X-7169-g

Jede 1-4,1fieserve Bank
Of Richmond,

June 1, 1932.

Uti Walter Wyatt, General Counsel,
f e d e r a l Reserve Board,
Washington, D. C.
Dear Mr. Ifyatt:
Your l e t t e r of May 36th, which was acknowledged by Mr.
Broaddus, was r e c e i v e d during my absence from the bank which accounts
x
f o r my delay in r e p l y i n g .
I can f u l l y a p p r e c i a t e the f a c t t h a t you have been burdened
with important m a t t e r s and t h a t i t has been impossible f o r you to c a l l a
meeting of the counsel f o r the Federal r e s e r v e banks with t h e Standing
Committee on C o l l e c t i o n s to consider the m a t t e r of "cashing" Government
checks and w a r r a n t s by Federal r e s e r v e banks, which was r e f e r r e d to the
counsel by the Governors' Conference of December, 1931. I am sure t h a t the
o f f i c e r s of the Federal r e s e r v e banks a l s o have been burdened with work r e s u l t i n g p r i n c i p a l l y from the o p e r a t i o n s of the Reconstruction Finance Corpor a t i o n , as I know t h i s has been t r u e i n my c a s e .
I t w i l l be agreeable with me to hold a meeting of the counsel
and Standing Committee on C o l l e c t i o n s during the summer a f t e r Congress a d j o u r n s , and I presume t h a t one time w i l l s u i t about a s w e l l a s a n o t h e r . We
a r e almost c e r t a i n , however, to run into v a c a t i o n s and i t i s more than l i k e l y
t h a t some of the members of the Committee, a s w e l l a s c e r t a i n counsel, may
not be able to a t t e n d the meeting u n l e s s they know of i t f a r enough in advance
to arrange t h e i r v a c a t i o n a c c o r d i n g l y . You w i l l r e c a l l t h a t i n the summer of
1930 when the Standing Committee on Collections was c o n s i d e r i n g the s u b j e c t
of a uniform cash c o l l e c t i o n c i r c u l a r in c o n s u l t a t i o n with a s p e c i a l committee
of counsel we experienced a g r e a t d e a l of d i f f i c u l t y i n reaching an agreement
on the f i n a l r e p o r t and I was considerably delayed and inconvenienced because
c e r t a i n of the members p r e s e n t a t our f i r s t meeting s t a r t e d on v a c a t i o n s and
could not be r e a c h e d . While p e r s o n a l l y I am p e r f e c t l y agreeable to holding
the meeting t h i s summer, a s long a s the m a t t e r has a l r e a d y been delayed f o r
q u i t e a while i t might be a d v i a a l k to arrange a meeting during the e a r l y f a l l
a f t e r a l l of the counsel and members of the C o l l e c t i o n Committee have r e t u r n e d
from v a c a t i o n .
I t occurs to me t h a t your work w i l l be made very much e a s i e r
and you w i l l not be s u b j e c t e d to the s t r a i n t h a t w i l l almost c e r t a i n l y r e s u l t
i f you attempt to have a n agreement reached b e f o r e the summer i s o v e r . I
w i l l be very glad to communicate with the o t h e r members of the Standing Committee
on C o l l e c t i o n s a s soon a s you l e t me know i f you d e s i r e to have the meeting
during the summer months.
I am sending you under separate cover e i g h t copies of the r e p o r t
of the Standing Committee on C o l l e c t i o n s to the f a l l 1931 Conference of Governor?,,
The t o p i c under c o n s i d e r a t i o n i s t r e a t e d a t the beginning of the r e p o r t . Ifor




4 4 0

X-7169-g
Mr, Walter Wyatt> Geharal Cotinsdi»
Federal Heserve BoArd,
Washington; Dt Ci

«4 &

June 1, 1932

supply of e x t r a copies has been e n t i r e l y exhausted.and I am sorry t h a t I
am not able to send you the number r e queste d. When the r e p o r t was f i n i s h e d
i n August, 1931, I sent a copy to the Governor of each Federal Reserve Bank
with a l e t t e r d a t e d August 13th, and I a l s o sent an e x t r a copy to the
Federal Be serve Banks of Chicago, and Dallas f o r the use of t h e i r c o u n s e l .
I a l s o sent a s e p a r a t e copy to each member of the Standing Committee on
C o l l e c t i o n s , r e p r e s e n t i n g the Federal Reserve Banks of New York, P h i l a d e l p h i a , Cleveland, Richmond and S t . Louis. There a r e , t h e r e f o r e , seven
banks which should have a t l e a s t two copies of the r e p o r t in t h e i r f i l e s .
I t does not seem to me t h a t i t w i l l be necessary f o r you to send a copy to
those banks r e p r e s e n t e d on the c o l l e c t i o n committee since I am sure t h a t
the committee members can l e t t h e i r counsel have t h e i r c o p i e s . I a l s o sent
on August 12th seven copies to Mr* McClelland f o r the use of members of the
Federal Reserve Board and i t i s probable t h a t you w i l l f i n d some of these
in the f i l e s of the Board. When the conference met the f i r s t of December,
1931, I sent to Mr. S t r a t e r , c/o Federal Reserve Board, twelve copies f o r
the use of the Governors a t t e n d i n g the Governors' Conference. I t i s probable
t h a t some of these were l e f t i n the conference room and no doubt you w i l l
be able to g e t t o g e t h e r a s u f f i c i e n t number of copies to supply the counsel.
Awaiting your f u r t h e r a d v i c e s , I am with h i g h e s t p e r s o n a l

regards,

Cordially yours,

(Signed) J . S. Walden, J r . ,
Controller.
JSW:D

*