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FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE T O THE FEDERAL RESERVE B O A R D X-3715 May 1 2 , 1923. SUBJECT: F u n c t i o n a l Expense Report, F i r s t Quarter 1923- Dear S i r : There i s b e i n g s e n t to your bank today under s e p a r a t e cover a summary of the f u n c t i o n a l expense r e p o r t s f o r t h e f i r s t q u a r t e r of 1923* Your p a r t i c u l a r a t t e n t i o n i s i n v i t e d to f i g u r e s shown on pages 2$ and 26 of t h i s r e p o r t , which r e l a t e t o t h e currency and coin f u n c t i o n . You w i l l n o t e t h a t under "Currency R e c e i v i n g and S o r t i n g " u n i t t h e r e i s a v a r i a t i o n in the u n i t c o s t r a n g i n g from .071 t o .124 i n t h e f i g u r e s r e p o r t e d f o r the main b a n k s , and from .044 to .32 i n the c a s e of the b r a n c h e s . A comparison of t h e methods of a l l banks f o r t h e h a n d l i n g of t h i s work does not i n d i c a t e any v a r i a t i o n s in t h e p r a c t i c e which would account f o r such a wide spread i n the cost. I t seems p r o b a b l e , t h e r e f o r e , t h a t the methods used by the banks a r e n o t u n i f o r m , e i t h e r with r e s p e c t to the f i g u r e s r e p o r t e d f o r "Number of b i l l s r e c e i v e d and counted", or i n making t h e a l l o c a t i o n of expanses f o r t h i s u n i t . The f i g u r e s r e p o r t e d f o r "Coin" r e s u l t i n an even g r e a t e r v a r i a t i o n , the u n i t c o s t r a n g i n g from . 0 1 t o -059 f o f t h e main banks from .015 t o .562 f o r t h e b r a n c h e s . The r e c e n t comparison of methods i n d i c a t e s t h a t a l l banks a r e n o t r e p o r t i n g the volume f i g u r e s on t h e same b a s i s ; t h e r e i s , t h e r e f o r e , enclosed a memorandum which, i t i s hoped, w i l l make c l e a r e x a c t l y how the volume f i g u r e s t o be r e p o r t e d f o r t h i s f u n c t i o n should be d e t e r m i n e d . I t i s requested that a l l f i g u r e s , h e r e a f t e r r e p o r t e d , b e g i n n i n g with the month of A p r i l , be a r r i v e d a t by t h i s method. I t a l s o seems p r o b a b l e t h a t some of t h e banks have not been p a r t i c u l a r about making a d i s t r i b u t i o n of t h e s a l a r y c o s t . In c a s e s where h e l p i s borrowed from o t h e r departments t o a s s i s t i n the c o u n t i n g of money, or when money c o u n t e r s a r e l o a n e d f o r o t h e r work an a l l o c a t i o n of expense should be made. If t h i s i s n o t done t h e expense f i g u r e s r e p o r t e d w i l l be of l i t t l e value* - 2 - x-3715 W i l l you k i n d l y a d v i s e whether or n o t the volume f i g u r e s a l r e a d y r e p o r t e d by your "bank f o r the f i r s t q u a r t e r of 1923 conform t o t h e enclosed memorandum, and a l s o whether or n o t t h e e x pense f i g u r e s as r e p o r t e d a r e s u b s t a n t i a l l y c o r r e c t . In case e i t h e r of t h e s e f i g u r e s i s i n c o r r e c t , w i l l you, i f f i g u r e s a r e a v a i l a b l e , submit c o r r e c t e d f i g u r e s f o r t h i s p a r t i c u l a r f u n c t i o n and p e r i o d . P l e a s e r e p l y to Mr. L. E. Bounds, S e c r e t a r y , care F e d e r a l Reserve Bank of New York. Very t r u l y y o u r s , A. C- M i l l e r , Chairman, B o a r d ' s Committee on Economy and E f f i c i e n c y . (Enclosure) TO Bank R e p r e s e n t a t i v e , Currency & Coin F u n c t i o n . Copy t o a l l Governors. " " Procedure Committee Chairmen. X-3715* METHOD TO BE USED IN REPORTING VOLUME OF CURRENCY AND COIN HANDLED IN CONNECTION WITH FORM E- CUHRENCY Number of P i e c e s A c t u a l l y Received and. Counted. The f i g u r e r e p o r t e d under t h i s h e a d i n g should b e the number of b i l l s h a n d l e d and should i n c l u d e a l l b i l l s r e c e i v e d in t h e bank from every s o u r c e , which a r e c ounted, each b i l l to appear i n t h e count b u t once This would i n c l u d e t h e f o l l o w i n g : (a) D e p o s i t s r e c e i v e d over t h e c o u n t e r . (b) Shipments r e c e i v e d from member and non-member b a n k s . (c) Shipments of f i t n o t e s from o t h e r Reserve b a n k s . I t should n o t i n c l u d e : (a) Shipments of new money from Washington. ( e ) Money r e c e i v e d from the Agent, e i t h e r new o r f i t ( f ) Money r e c e i v e d from branches or hd..a o f f i c e . The f i g u r e r e p o r t e d , as above, should correspond w i t h t h e number of b i l l s counted and s o r t e d w i t h i n the month, and should n o t i n c l u d e any b i l l s r e c e i v e d and s t o r e d f o r subsequent handling* Any such b i l l s should be taken up i n the l a t e r r e p o r t f o r the month i n which t h e y a r e a c t u a l l y s o r t e d and c o u n t e d . I f , i n making up the above f i g u r e s , i t i s the p r a c t i c e of your bank to b a s e t h i s count on the a g g r e g a t e of the whole number of p i e c e s of currency handled i n your currency s o r t i n g d e p a r t m e n t , i t w i l l t h e n probably be n e c e s s a r y f o r you t o s u b t r a c t from such a g g r e g a t e t h e number of p i e c e s which have been s o r t e d or handled a second t i m e . This would i n c l u d e such items as the f o l l o w i n g : (g) Notes of o t h e r Reserve b a n k s , b o t h f i t and u n f i t . n o t p u t up on o r i g i n a l s o r t i n p r o p e r form f o r s h i p m e n t . (h) Odds which have been i n c l u d e d i n one d a y ' s a g g r e g a t e and c a r r i e d o v e r n i g h t t o be included i n a subsequent aggregate. I t is important t h a t the f i g u r e reported s h a l l not include a d u p l i c a t e count of any b i l l s r e g a r d l e s s of the r e a s o n f o r t h e r e c o u n t . I n a d d i t i o n to and supplementing the above f i g u r e , you a r e a l s o r e q u e s t e d t o r e p o r t a s a s e p a r a t e item t h e number of b i l l s r e h a n d l e d , t h a t i s , n o t p u t up on o r i g i n a l s o r t i n p r o p e r form f o r f i n a l d i s p o s i t i o n . This might i n c l u d e c l a s s e s "g" and "hM above r e f e r r e d t o . I t should n o t i n c l u d e t h e r e c o u n t o r v e r i f i c a t i o n count of any b i l l s . This - 2 - X-3715a f i g u r e may be r e p o r t e d a g a i n s t the c a p t i o n "Number of p i e c e s r e h a n d l e d which should be w r i t t e n i n on the b l a n k l i n e under "Currency" on page 35 of Form S . eorn Number of Coins: Received and Counted. I n d e t e r m i n i n g the number to be r e p o r t e d under t h i s h e a d i n g , the same p r i n c i p l e should be followed as i n d e t e r m i n i n g t h e count of b i l l s . Coin handled a second time i n c o n n e c t i o n w i t h wrapping or r e - b a g g i n g t o s m a l l e r u n i t s should not be included i n t h i s c o u n t . Coin r e c e i v e d from t h e Mint or o t h e r F e d e r a l Reserve Banks or Branches may be i n c l u d e d i n t h i s count once, p r o v i d e d i t i s a c t u a l l y co u n t ed , but n o t o t h e r w i s e .
@FedFRASER