Full text of Mimeograph Letters and Statements of the Board : Disposition of Unfit Federal Reserve Notes, Number 495, Volume 2, Page 831

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Washington, D. C.,
January 18, 1916 •
SUGGESTED PROCEDURE INVOLVING THE DISPOSITION OF
UNFIT FEDERAL RESERVE NOTES TO ~ACCOHPAWY
CONFIDENTIAL LETTER TO FEDEPAL
RESERVE AGCNWC.

I,
Each Foder;a Reserve Agent shall transmit to the Treasurer
of the United States ?*n amount in gold equal to a ! least five per cent
of all outstanding Federal reserve notes covered by a deposit v;ith him
of gold or ln.7rf.ul money.
II.
The Treasurer of the United States shall open an account
T7ith each Fedoral Reservo Agent in addition to the redemption account
already opened Tdth each Federal reserve hank*
III.
Whenever Federal reserve notes are redeemed out o' the
account of the Fedoral Reserve Agent* such notes shall he held for the
account of such Agent.
Whenever Federal reserve notes are redeemed out of the
five per cent redemption fund of the hank, suen notes shall he held
for the account of such hank.
IV.
Each Federal reserve hank shall give to th^ Treasurer
of the United States a pov/er of attorney authorizing him to transfor
to the account of the Federal Reserve Agent all unfit Federal reserve
notes of such hank non or at. any time hold hy the Treasurer for the
account of such hank from r;hatever source received.



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v.
Each Federal Reserve Agent shall give to the Treasurer
of the United States a pc-or of attorney authorising him to trans
fer for such Agent and in his name to the Comptroller of the
Currency all unfit Federal reserve notes now or at any time held
by the Treasurer for account of such Agent from whatever source
received*
VI.
The Treasurer of the United States, by virtue of
authority given him in the power of attorney mentioned in V,
will deliver to tho Comptroller oi the Currency> .in the name
of the Federal Reserve Agent and for his credit., all unfit Fed-*
eral reserve notes row or at any time held by such Treasurer*
VII.
The Comptroller of the Currency* on receipt of such
unfit Federal reserve notes, will arrange for their destruction,
said will credit the account of the Federal Reserve Agent with
the amount of notes thus

destroyed
VIII.

In reducing its liability on any of its outstanding
Feder?.l reserve notes a Federal reserve bank may transfer to
the account of its Federr.l Reserve Agent held with the Treas­
urer of the United States so much of its five per cent redemp­
tion fund as is not required to be kept against the balance
of its outstanding notes not covered by gold or lawful money.
The balanco of the 100$ of gold or lawful noney to be de­
posited for the reduction of its liability shall be deposited



by the bank direct vrith its Federal Reserve Agent or to the
credit of such Agent's account v.'ith the Federal Reserve Board*
IX.
Federal reserve banks holding their ovm unfit Federal
reserve notes may transr.it then to the Treasurer for redemption
cut and punched in the manner prescribed for unfit United States
currency»
X.
All unfit Fodcral reserve notes received by Federal
Reserve Agents shall be’ forwarded to the Comptroller of the Cur­
rency for destruction in the .:;aniier provided by Result ion 0*
Series of 1915*




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