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S-514
BOARD OF GOVERNORS
273
OF" THE
FEDERAL RESERVE SYSTEM
WASHINGTON
ADDREBB DF'F'ICIAL CDRREBI"DNDENCE
TD THE BDARD
June 23, 1942.
,
.
Dear Sir:
There have been forwarded to you today under separate cover
the indicated number of copies of the following forms, a copy· of
each of which is attached-hereto, for the use of State bank members
and their affiliates in submitting reports as of the next call date:
Number of
copies
Form F. R. 105 (Call 91), Report of condition of State
bank member.
Form F. R. l05b (Revised August 1939), Loans and advances
to affiliates and investments in and loans secured by
obligations of affiliates.
Form F. R. lOSe (Call 91) , Publisher's copy of report of
condition of State bank member.
Form F. R. 105-i {Schedule A.l, Revised June 1942),
Personal loans and retail instalment paper.
Form F. R. 220 (Revised August 1935), Report of affiliate
or holding company affiliate.
Form F. R. 220a (Revised December 1938), Publisher's copy
of report of affiliate or holding company affiliate.
Form F. R. 220b (Revised February 1938). Instructions for
preparation of reports of affiliates and holding
company affiliates.
There have also been forwarded to you
copies of instructions
(s-514a) regarding the reporting of reciprocal interbank balances in
call reports, and
copies of corresponding instructions (S·514b)
pertaining to weekly condition reports.
I
-2-
S-514
274
Schedule A.l, "Personal loans and retail instalment paper'',
has been amended by adding a new item, "Personal single-payment loans".
In addition the definition of repair and modernization instalment
loans has been revised to make it clear that the amounts included in both
subitems should represent the unpaid balances of instalment loans to
finance alterations and improvements to existing completed properties.
Form F. R. 105 has been changed in two respects: in Schedule
B provision has been made for reporting separately the amounts of
Treasury certificates of indebtedness and United States savings bonds;
in Schedules D and ~ provision has been made for reporting in parentheses the gross amounts of reciprocal interbank demand balances with
banks in the United States, except private banks and American branches
of foreign banks. The reciprocal portions of such balances are required to be excluded hereafter from the amounts of interbank balances
reported against item 2 of Schedule D and item 4 of Schedule E. The
parenthetical items in Schedules D and E will show the amount of
reciprocal balances carried on the call date. The banks' special
attention should be called to the enclosed instructions pertaining to
the reporting of reciprocal bank balances in call reports. The letter
sending out blank forms and instructions for the next call should be
so mailed as to reach the banks on or after July 1. It is understood
that the Comptroller's office will follow the same schedule in mailing call report forms to national banks.
Weekly condition reports of member banks in leading cities,
Form F. R. 416. should also show reciprocal interbank demand balances
net beginning with the report as of ~.Jdnesday, Jul;y 8. We should like
to know, however, the extent to which such banks have been reporting
reciprocal balances gross and, accordingly, th~should be requested
to show, in th~ir weekly reports for July 8, the amount of reciprocal
demand balances included in both "due from" and "due to" in tho preceding weekly report. For this purpose it is suggested that eo.ch
weekly reporting bank be given a copy of the enclosed instructions
pertaining to weekly reports. These instructions should not. howevGr,
be sent to the weekly reporting banks until July 1. Tho amount of the
memorandum i tern reported should be shovm in the summary and transcript
of weekly condition reports as of July 8 that you send to the Board.
Very truly yours.
~~-AL. P. l!3ethea,
Assistant Secretary.
Enclosures 9
TO THh.: PRESIDENTS OF ALL FEDERAL R.c;SERVE: BANKS
(Enclosures with addressed copi0s only)
June 23, 1942
INSTRUCTIONS R.l!iGARDING THB R~PORTING OF RiCIPROCAL INTERB.ANK BALANCES
IN CALL REPORTS Of CONDITION
Beginning with the current call, reciprocal interbank demand
deposits with bunks in the United States, except private banks and
American branches of foreign banks, should be reported net, instead of
gross as required heretofore; and the general instructions for tho preparation of reports of condition contained in Form F.R. lOSa pertaining
to item 2 in Sch13dulo D e.nd item 4 in ~ch8dule E are modified accord ..
ingly, Reciprocal interbank doposi ts arise when two bo.nks maintain
deposit accounts with each other, i.e., each bank has both a "due from"
and a "due to 11 account with the other bank.
In determining the net amount due from or due to each other
bank with which reciprocal deposits are maintained, all demand deposit
accounts with each such bank should be combined except (1) accounts
that do not include any collected funds but merely represent cash items
in process of collection, and (2) balances standing to the credit of a
bank's trust department. The reciprocal amount should then be subtr~cted
from ''due from" and 11 due to 11 ; and the amount thus subtracted should be
shown in the parenthetical space provided for the purpose following
item 2 in Schedule D and item 4 in Schedule E. In other words, the
balance due from a bank should be subtracted from both assets and liabilities if it is less than the balance due to the same bank; and vice
versa.
Following is an illustration of reciprocal interbank demand
accounts: Bank A has a demand deposit of $1;000,000 with Bank B, and
Bank B has a demand deposit of $200,000 with Bank A. On a "net" basis,
as now required, Bank A will report only $800,000 as due from Bank B
and nothing as due to Bank B; conversely, Bank B will report only
$800,000 as due to Bank A and nothing as due from Bank A. In addition,
both banks will show $200,000 in the p~renthetioal spaces provided for
the purpose followinb the captions of item 2 in Schedule D and item 4
in Schedule E.
June 23, 1942
INSTRUCTIONS REG.ARDING
R~PORTING
OF RECIPROCAL INTE~BAKK BALANCES IN
WEEKLY CONDITION REPORTS
As you have been advised in connection ~nth the current call
for condition reports, r&ciprocal interbank demand deposits with banks
in the United States, except private banks and American branches of
foreign banks, are to be reported net in call reports of condition, instead of gross as heretofore. The same procedure is to be followed in
preparing weekly condition reports, Form!<'. R. 416, beginning with
reports rendered as of Wednesday, 'July 8, 1942. Reciprocal interbank
deposits arise when two banks maintain deposit accounts with each other,
i.e., each bank has both a "due from." and a "due to" account with the
other bank.
In determining the net amount due from or due to each other
bank with which reciprocal deposits are maintained, all demand deposit
accounts with each such bank should be combined except (1) accounts that
do not include any collected funds but merely represent cash items in
process of collection, and (2) balances standing to the credit of a
bank's trust department. The reciprocal amount should then be subtr~cted from "due from" and "due to" .items 3-b and 5-d, respectively, in
the weekly condition report. In other words, the balance due from a bank
should be subtracted from both assets and liabilities if it is less than
the balance due to the s~e bank; and vice versa.
Following is an illustration of reciprocal interbank demand
accounts: Bank A has a demand deposit of $1,000,000 with Bank B, and
Bank B has a demand deposit of $200,000 with Bank A. On a "net'' basis,
as now required, Bank A will report only $800,000 as due from Bank B
and nothing as due to Bank B; conversely, Bank B will report only
$800,000 as due to Bank A and nothing as due from Bank A.
In order to provide statistics showing the effect of the new
requirements (that reciprocal bank balances be reported net, instead of
gross as heretofore) you are r~quested to report the a.rr~unt of the reciprocal portions of demand balances which, on July 1, were included in
both "due from" and ndue to". These figures should be reported by
inserting the following memorandum i tern a.t the end of your July 8
report:
"Reciprocal portions of demand balances with banks in the
United States, except private banks and American
brunches of foreign bunks, included in both "due
from" o.nd "due to", in th0 report rendered as of
July 1, 1942 • • . • • • . . · · · • · · · · · •
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@FedFRASER