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X-6GS KxO W P S H A R D IN S BOVM HORf P A U L M W ARB UR 8 V lC I GOVERNOR FREDERIC A DELANO AD O LPH C M ILLE R CHARLES S N A N U N f f i c io m b m b b r s W ILL IA M 9 MCADOO SECRETARY OP THE T M M I I f JOHN SHELTON W ILLIAM S COHFTROLLRR OF T H I CURRBRCV FEDERAL RESERVE BOARD WASHINGTON H PAR K ER W IL L IS SECRETARY . SHERM AN P ALLE N A M T SECRETARY ARB FISCAL ASEHT AD D R E SS R E P L Y T O December 36* 19X7. Dear Sir: It appears that in some sections of the country it is not customary for national banks* state banks* .*nd trust compaxiies which have savings departments to require the pre sentation of the pass-book whenever savings accounts are with drawn* and in some cases national banks have indicated that they are at a disadvantage by reason of the Board*s regulation as to savings accounts* To meet this situation it has been suggested that Regulation 0* Series 1917* be amended insofar as it relates to savings accounts* to read as follows: nThe term 'savings accounts* Shall be held to in clude those accounts which are usually carried on the books of the banks in ledgers or accounts separate and distinct from commercial or checking deposits; which are not ordinarily used or drawn against by the depositor for current expenses and which* by the printed regulations of the bank* accepted by the depositor at the time that the account is opened - - (a) The depositor nay at any time be required by the bank to give notice of an intended withdrawal not less than thirty days before the withdrawal is made. (b) The pass-book* certificate* or other similar form *f receipt must be presented to the bank when*" ever a deposit or withdrawal is made* but this require ment say be waived, by the bank in those cases m which the account does not exceed five thousand dollars. In any case in which thi3 requirement is waived all sums standing to th3 credit of the depositor in ex cess of five thousand dollars shall be treated as demand deposits.1 1 In view of the fact that the reserves required against "time deposits1 and "saving accounts1 are very low, only 3$, the 1 1 Board is reluctant to take any action which could be abused and which would result in a lowering of the reserves carried with the Federal Reserve banks, but in view of the requests which have been xzade for a modification of the present regulation, the Board would lik3 to have your opinion as to the advisability of caking the change above outlined. It is particularly desirous of avoiding a situation which .would enable a bank/ by the simple expedient of requiring notice at its discretioh, to classify all its deposits as time deposits, thereby reducing its.reserves to 3$« Very truly yours, Governor.
@FedFRASER