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405 B O A R D OF G O V E R N O R S S-15? OF THE ADDRlll OFFICIAL CORRKIPONDCNOE TO THE BOARD A p r i l 8 , 1939. Dear S i r : The Board concurs i n the a c t i o n of t h e Conference of P r e s i d e n t s h e l d March 6 , 1939, i n approving t h e f o l l o w i n g r e c ommendations o f t h e Standing Committee on C o l l e c t i o n s , c o n t a i n e d i n i t s r e p o r t dated January 1 4 , 1930. Paragraph numbers r e f e r t o corresponding numbers i n t h e Committee's r e p o r t . (3) Country i t e m s payable i n own F e d e r a l Reserve bank or branch t e r r i t o r y That each F e d e r a l Reserve bank and branch g i v e d e f e r r e d c r e d i t of not t o e x c e e d two b u s i n e s s days f o r a l l country i t e m s payable i n i t s own t e r r i t o r y , r e g a r d l e s s o f whether such Items a r e r e c e i v e d from i t s own member banks o r from o t h e r F e d e r a l Reserve banks and branches and t h e i r d i r e c t r o u t i n g member banks. (4) I t e m s payable o u t s i d e own F e d e r a l R e s e r v e bank o r branch t e r r i t o r y That each F e d e r a l Reserve bank and branch g i v e d e f e r r e d c r e d i t o f not t o e x c e e d t h r e e b u s i n e s s days f o r a l l items payable o u t s i d e of i t s own t e r r i t o r y when r e c e i v e d from i t s own member banks. (5) and (6) Items routed d i r e c t e i t h e r by o r d i n a r y o r a i r mail That each F e d e r a l Reserve bank and branch g i v e d e f e r r e d c r e d i t of not t o exceed t h r e e b u s i n e s s days from d a t e o f d i s p a t c h f o r a l l i t e m s routed d i r e c t e i t h e r by o r d i n a r y o r a i r mail t o o t h e r F e d e r a l Reserve banks and b r a n c h e s , p r o v i d e d , however, t h a t one and two-day d e f e r r e d c r e d i t from d a t e of d i s p a t c h be g i v e n f o r t h o s e i t e m s which can be c o l l e c t e d i n one and two d a y s . 8-157 (7) Member banks' own d r a f t s on t h e i r commercial bank correspondents That each F e d e r a l Reserve bank and branch g i v e d e f e r r e d c r e d i t based on a c t u a l t r a n s i t time f o r member banks' own d r a f t s on t h e i r commercial bank c o r r e spondents. (10) Amend paragraph (c) of S e c t i o n 2 of R e g u l a t i o n D That, a t an a p p r o p r i a t e t i m e , t o be determined by the Board of Governors, R e g u l a t i o n D be amended t o agree with Regulation J as i t r e l a t e s to u n c o l l e c t e d funds. (11) T e l e g r a p h i c a d v i c e s regarding dishonored items That no w i r e c o s t s be absorbed i n c o n n e c t i o n w i t h t e l e g r a p h i c a d v i c e s regarding dishonored i t e m s r e c e i v e d from a d i r e c t r o u t i n g bank or from a F e d e r a l Reserve bank or branch. (12) Absorption of s h i p p i n g charges on currency and c o i n r e c e i v e d from nonmember r e m i t t i n g banks That no s t e p s be taken a t t h i s time t o b r i n g about u n i f o r m i t y of p r a c t i c e on the part of F e d e r a l Reserve banks w i t h regard t o the a b s o r p t i o n of s h i p p i n g expense on currency and c o i n r e c e i v e d from nonmember r e m i t t i n g banks. (13) Cash l e t t e r s prepared by n a t i o n a l l y known corporations That, w h i l e t h e r e i s no o b j e c t i o n t o t h e a c c e p t a n c e by F e d e r a l Reserve banks from t h e i r member banks of d e p o s i t s of checks where the cash l e t t e r s a r e prepared by n a t i o n a l l y known c o r p o r a t i o n s but a c t u a l l y d e p o s i t e d by the member banks, no arrangements be made w i t h member banks f o r t h e a c c e p t a n c e of d e p o s i t s of checks d i r e c t l y from such c o r p o r a t i o n s thems e l v e s f o r t h e c r e d i t of t h e member banks w i t h o u t f i r s t s e c u r i n g o p i n i o n of c o u n s e l t h a t such a c c e p t a n c e i s n o t i n v i o l a t i o n of laws r e l a t i n g t o branch banking. (23) Subcommittee tions of t h e Standing Committee on C o l l e c - That a Subcommittee of t h e Standing Committee 407 -3- S-157 on C o l l e c t i o n s c o n s i s t i n g of t h r e e p e r s o n s , who a r e n o t members of the Standing Committee on C o l l e c t i o n s and who can d e v o t e t h e i r e n t i r e time t o the development o f t h e s u b j e c t and a comprehensive r e p o r t t h e r e o n , be a p p o i n t e d by t h e Conference of P r e s i d e n t s t o make a study of t h e check c o l l e c t i o n system i n i t s e n t i r e t y t o determine what improvements may be made. The recommendations c o n t a i n e d i n paragraphs (8) and (9) with r e s p e c t t o an amendment t o R e g u l a t i o n J and a change i n the check c o l l e c t i o n c i r c u l a r r e l a t i n g t o d i r e c t r o u t i n g and t h e r e c ommendations c o n t a i n e d i n the r e p o r t of the Committee of Counsel, paragraphs (14) t o ( 2 2 ) , are now under c o n s i d e r a t i o n . You w i l l be a d v i s e d w i t h r e s p e c t t o t h e s e recommendations a t an e a r l y d a t e . The Board understands t h a t t h e Standing Committee on C o l l e c t i o n s and t h e Committee of Counsel w i l l meet i n Chicago on A p r i l 19 f o r t h e purpose of c o n s i d e r i n g t h e proposed r e g u l a t i o n on noncash c o l l e c t i o n s , amendments t o R e g u l a t i o n J , and changes i n the uniform paragraphs of t h e cash and noncash c o l l e c t i o n c i r c u l a r s . In the c i r c u m s t a n c e s , i t i s assumed t h a t no F e d e r a l Res e r v e bank w i l l make any of the changcs which have been s u g g e s t e d in i t s cash or noncash c o l l e c t i o n c i r c u l a r s or i n a v a i l a b i l i t y s c h e d u l e s u n t i l a f t e r t h e s e m e e t i n g s have been h e l d . In forwarding the r e v i s e d time s c h e d u l e s between Fede r a l Reserve bank and branch c i t i e s t o the Board f o r a p p r o v a l , i t w i l l be a p p r e c i a t e d i f a t the same time you w i l l send us . c o p i e s of the cash and noncash c o l l e c t i o n c i r c u l a r s w i t h the proposed changes i n c o r p o r a t e d t h e r e i n i n order t h a t t h e Board may have an o p p o r t u n i t y t o review them b e f o r e t h e y a r e r e l e a s e d . Very t r u l y y o u r s , L. P. Bethea, Assistant Secretary. TO PRESIDENTS OF ALL FEDERAL RESERVE BANKS. 408 BOARD OF G O V E R N O R S OF THE FEDERAL RESERVE SYSTEM S-158 WASHINGTON A D D R E S S OFFICIAL C O R R E S P O N D E N C E TO THE BOARD April 13, 1939 Dear Sir: For your information there is enclosed a copy of a letter sent today to Mr. Harrison, President of the Federal Reserve Bank of New York. V.ery truly yours L. P. Bethea, Assistant Secretary Enclosure TO PRESIDENTS OF ALL FEDERAL RESERVE BANKS EXCEPT NEW YORK
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