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8-73 Reg. PINTERPRETATION OF LAW OR REGULATION {Copies to be sent to all Federal reserve banks) February 4, 1938. Mr. , Vice President, Federal Reserve Bank of Dear Mr. : This refers to your letter of March 8, 193?, relating to an inquiry from Company, , , with respect to whether cash, notes receivable, and accounts receivable may be considered readily marketable assets for the purposes of subsections (b) and (c) of section 5144 of the Revised Statutes of the United States. As you have been advised, e reply to your letter has been deferred awaiting the . development of experience through action by the Board on requests of the Commissioner of Internal Revenue for certifications in connection with claims of holding company affiliates for credits for income tax purposes. However, while no such requests have yet been received, it is felt that a reply should not be further delayed. The Board feels that the question whether certain assets are readily marketable assets within the meaning of subsections (b> and (c) of section 5144 is a question of fact which should be determined primarily by the holding company affiliate itself, bearing in mind th&t the law apparently contemplates that the assets shall be of such a nature that their fair market value can be easily ascertained with reasonable accuracy and can be readily realized in the market at any time in order to pay assessments on bank stocks or to assist subsidiary banks through voluntary contributions. Assets of any kind., other than bank stocks, will satisfy the requirements of the law if they are in fact readily marketable. Quite clearly they need not consist only of stocks, bonds, and similar assets commonly known as "securities". On the other hand, in view of the nature of the present inquiry, it should be pointed out that "readily marketable assets" cannot be properly construed to include all assets which may be classified as "current assets". Thus, while notes, at least, may be readily marketable in some instances, notes and accounts receivable cannot be considered readily marketable assets merely because it is contemplated that they will be collected within a relatively S-73 Reg. P- -2 short time. However, in the light of the purposes of the requirements under consideration, it is believed that cash, in the sense of United States currency and demand bank deposits, should be deemed to be a readily marketable asset within the meaning of such requirements. It is trusted that the foregoing comments may be of assistance to ________________________ Company in determining what action it must take in order to comply with the statutory provisions in question and it will be appreciated if you will advise that organization concerning the Board's views. Very truly yours, (Signed) L. P. Bethea L. P. Bethea, Assistant Secretary.