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W. P. G. HARDING, GoVERNOR PAUL M. WARBURG, VICE GOVERNOR FREDERIC A. DELANO ADOLPH C. MILLER CHARLES S. HAMLIN EX-OFFICIO MEMBERS WILLIAM G. McADOO SECRETARY OF THE TREASURY CHAIRMAN JOHN SKELTON WILLIAMS FEDERAL RESERVE BOARD COMPTROLLER OF TKE CURRENCY WASHINGTON H. PARKER WILLIS, SECRETARY SHERMAN P. ALLEN, ASST. SECRETARY AND FISCAL AGENT ADDRESS REPL.Y TO FEDERAL RESERVE BOARD April 5, 1918. X-869 Dear Sir: The Federal Resorve Board has caroi~ly con~idered the report submitted by the Transit Managers of the Federal Reserve banks, endorsed by the Governars o£ tho banks, which was discussed in conference :i.n Wash- ington recently, ani has reached the following concl~sicns: l. The Board approves the recon.rnendation to suspend 1 or eliminate for the tirr.e being, cervice cha.l"'ges. for the collection of caoh itenJS; this elimination of charges to a.pply to checks received frou:. member banks and fro.m other Federal Reserve banks and to become effective on and after June 15 1 1918. 2. The Board approves the recoc:mcnda.tion that the 10¢- charge on collection ite~ between Fe~eral Reoerve banks be eliminated for the present and until fu:rth~r noti~e 1 but that a charge of 15¢ per item be made on all such items returned unpaid, this rule to boeou:e effective June 15., 1918. a. The Board approves the reconnendation that telegraphic transfers be bougnt and sold at par, each Federal Reserve bank absorbing the telegraphic expense, but with the proviso that checks on other Federal Reserve cities or Feder~l Reserve Branch cities be taken at par, subject only to deferred availability in accordru1ce with re~Jlar ti~e schedules. 4. The Board approves in principle the recommendation that the discount rate on nail transfers shall be based upon tho fifteen day rate, but 1 because it is desirable that the rate for such transfers shall remain as nearly unifor.m as possible and not vary too frequently 1 suggests that for the tirr.e being and until further notice a charge of lO¢ per day per thou$and 1 or at the r.ate of 3.65 pe~ cent be fixed as the rate for all mail transfers. 5. endorse~ The Board approves the recomwendation of the Transit by the Governors, "That all trail transfers to banks in other Federal Reserve Cities be na.de by draft on the Federal Reserve Bank and sent direct to the bank to which the transfer is ordered, rather than to the Federal Reserve Ba.nk. 11 ~nagers 6 6. The Board approves the s~ggestion that there shall. be a general revision of all time schedules, effective June 15~ 1918, wh~ch shall take into consideration recent changes in nail train schedules, and the creatian of new collection centers at branch bank cities. 7. The Board approves the recom'llenda.tion that "trade acceptances 11 , cash items. wher~er payable, be handled as collection items, not as checks or ite~s, but suggests that "bankers' acceptances" be. treated as cash T~e Board has under consideration and expects to approve within a few days a plan for linking together by private telegraph system the twelve Federal Reserve banks with its office at Washington, and expects these to have/additional facilities available within a short tine. A number of other recommendations relating to details and standard accounting methods have not been considered by the Board and are left for your deter-mination. Very truly yours, Governor.
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