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271
Regulation No.___ ■___
Series 1915.
Washington, June 20, 1915.
REGULATIONS FOR THE GUIDANCE OF FEDERAL RESERVE .AGENTS
IN THE MATTER OF ISSUANCE AID REDEMPTION OF FEDERAL RESERVE NOTES .
. . 1*
Federal Reserve Agents in making requisitions for Federal
reserve notes to meet spy] ioations of Federal Reserve Banks, shall
use form 45.
2.
A Federal Reserve Bank in making application for an issue
of Federal reserve notes shall accompany thr> application with a ten
der of the requisite collateral, using for' this purpose form ED 21-1.
3*
The Federal Reserve Agont shall receipt for all collateral
accepted by him as fulfilling the requirements of Section 13 of the
Federal Reserve Act and xhe Regulations of the Federal Reserve Board
made pursuant thereto, using for this purpose the appropriate form
(either ED 21-2 or HD 22-2), and shall promptly notify the Federal
Reserve Board of the collateral accepted, using for this purpose the
appropriate lorn {either BD 21-3 or BD -2-3); and shall, furthermore,
report to the Federal Reserve Board each day all notes issued to and
withdrawn by said, bank, using form FRA 5.
<
4S3
'4fi
U pon receipt of the said collateral and upon being satisfied that the
bank hah the required gold reserve to protect its notes, and has, further
more taken appropriate steps to transmit to the Treasurer of the United
States the requisite gold redemption fund,
cent, he
at present fixed at five! per
will issue Federal reserve notes to se^id bank, and immediately
notify the Treasurer of the United States of said issue on form supplied
for this purpose*
5*.
If at any time the Federal Reserve Agent deems it necessary to
require changes in either the amount or the character of collateral deposited
to secure notes, he shall caJ,X upon the Federal Reserve Bank for additional
or new collateral
to be added
to or substituted for that which is deemed
unsatisfactory, issuing receipt therefor
BB ' 21-B
on the appropriate form (either
or BD 22-2 ), and shall notify the Federal Reserve Board by tele
graph" followed by confirmation on the appropriate form (either BD 21-3 or
BD 22*3 >.; .
6* !
A jiFederal Reserve Bank way reduce its circulation by depositing
its notes^&tihthe Federal Reserve Agent* it may reduce its liability on
account of outstanding notes ty depositing with the Federal Reserve Agent
.
,
«
•
gold, gold certificates;’,or lawful money to the. amount of such notes to be
retired
less .a ratabli* preportion of the amount
credit in the redemption ?uiid
of the Treasurer
either case a proportionate amount
shall be returned
willibe used.
of money standing to its
of the United States* In
of the collateral deposited by the bank
to it by the Federal Reserve Agent. Forms BD 28-1, 2, 3,
434
-3-
f >
7•
The Federal Reserve Bank may r through jLts Federal Reserve
Agent exchange notes that arc unfit for circulation, or may exchange notes of one denomination for those of another-
Every such
transaction shall he reported to the Federal Reserve Board by the
Federal Reserve Agent in daily report transactions in Federal Re
serve notes (Fora Fra - 5) -
8-
*
Any Federal Reserve notes unfit for circulation accumulated
by any Federal Reserve Bank shall be assorted by denominations and
each one hundred notes enclosed in paper straps lengthwise and crosswise (Similar to Forms 6074 and 6075 enclosed ac samples) each marked
with the denomination and the afnount.
Each package shall then be
punched in four places, each puncture being approximately Jfcj" from
the edge of the short side and
.
•
from the edge of the long side-
All packages shall be further cut in halves longitudinally, each
package of one hundred notec, either "uppers” or "lowers" shall
carry a serial number which shall agree with the serial number
on the corresponding package of one hundred half notes, either
"lowers" or "uppers".
One thousand half notes, either uppers or
lowers, of each denomination shall be enclosed in a paper bant!
marked with the denomination and amount contained therein, and
not to exceed four such bundles of half notes, either uppers or
lowers, shall be securely tied, wrapped and sealed, with a memo
randum enclosed inventorying the contents and stating the amount
and the bank by whom the notes are forwarded.
425
The upper halves will; be forwarded to the Comptroller of the Currency,
Treasury Department, Washington, D. C. and the lower halves will "be
forwarded to the Secretary of the Treasury (Division of Loans and
Currency) , Washington, D. C.
•
i
The notes will he forwarded hy regis-
%
tered mail in locked registered pouches, the same to he procured
from the local 'postmaster* and the forwarding agent will pay the
registration fee of ten cents for each four pounds weight.
The Fed
eral Reserve Agent will state, in iiis daily report to the Federal Re
serve Board the amount of unfit notes of each denomination forwarded
to the Treasury Department and the amount of unfit notes of each de-
r
'
•
nomination remaining in his possession*
Whenever Federal Reserve notes issued hy one Federal Reserve
Bank are received by
another ^Federal Reserve Bank, they shall he im
mediately returned to the issuing Bank for credit or redemption and
such transactions shall he reported to the Federal Reserve Board.
If at any time the gold reserve required hy law to h e '
held hy a Federal Reserve Bank against Federal Reserve notes issued
to it., falls below
*4Q$
(including therein the gold fund, required
to he maintained in the Treasury)
the Federal Reserve Agent
shall at once notify the Federal Reserve Board, and thereupon a
graduated tax upon such deficiency as provided in
of the
Federal
Reserve
*
Act
Section
shall be established and
11
shall he
computed as follows :
When reserveso fall, below 40$ but are in excess.?
of 32j-$, the tax.- upon the deficiency shall be at the
rate of 1$ per annum i
^
When reserves falii below 32^$ but are in excess>
of 30$, the tax upon the entire deficiency below 40$
-shall be at the rate of 2£$ per annum j
When reserves fall, below 30$ but exceed 27§-$
the tax upon the entire deficiency below 40$ shall be
at the rate of 4$.. per annum ;
and so on, increasing at the rate of 1^$ with each
reduction in reserve amounting to 3^$ or any fraction
thereof•
Gold Reserves..
against Federal
Reserve Notes
Penalty Tax
on Deficiency
in Reserves*
The Federal Reserve Board will*maintain a record :
(a)
Of the total or gross orders transmitted
by the Comptroller of the Currency for the
engraving and printing of Federal Reserve
notes i
(р) jOf the delivery of Federal Reserve notes
to Federal Reserve Agents J
(с) Of the stock of notes on hand in the Treas
ury of the United States available for ship
ment j
(d) Of the amount of Federal Reserve notes issued
through Federal Reserve Agents to their res
pective Federal Reserve Banks!
(e)
Of the amount of notes fit and unfit
for circulation which are in the pos
session of each Federal Reserve Agent*
C. S. HAMLIN,
Governor.
H. PARKER WILLIS,
Secretary.
6/16/15
@FedFRASER