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Ex -O ffic io m em b e rs W. P. G. HARDING, GOVERNOR PAUL M. WARBURG. VICE GOVERNOR FREDERIC A. DELANO ADOLPH C. MILLER CHARLES S. HAMLIN . WILLIAM a. MCADOO SECRETARY OF THE TREASURY . CHAIRMAN . JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD H. PARKER WILLIS, S E C R E T A R Y SHERMAN P. ALLEN, A S S T . S E C R E T A R Y ^ ^ A N D F IS C A L A C E N T X-440 WASHINGTON ADDRESS REPLY TO FEDERAL RESERVE BOARD October 19, 1917. (CONFIDENTIAL) Dear Sir: Enquiry has been made concerning the desirability of accept ance by Federal Reserve Banks of Russian bonds. In response to such enquiries, substantially the following answer is being giv en to Federal Reserve Banks: Concerning the acceptance of Russian bonds as collateral for special government deposits, the view here is that it would- not be desirable to discriminate against these bonds as such and that Federal Reserve Banks should deal with the natter using their discretion and protecting-themselves by adopting the fol lowing policy. As to all securities, except United States Gov ernment bonds, no one bank or trust company should be permitted to secure its deposits by more than a reasonable amount of any one security, particularly in the case of securities which are not selling on a conservative interest basis, the object being to have the collateral pledged by each depositary well diversefied. This will enable the Federal Reserve Banks to deal with the problem cautiously. This is intended for your confidential use. Yours very truly, Governor. .
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