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J::X OFFICIO MEM8&1t8 DAVID F. HOUSTON SECRETARY OF THE TREASURY CHAIRMAN FEDERAL RESERVE BOARD JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY ADDRESS REPLY TO W. T, CHAPMAN, SECRETARY Jl, G. EMERSON,ASSISTANT SECRETARY W. M,lMLAY,FlSCAL AGENT , WASHINGTON FEDERAL RESERVE BOARD W. P. G. HARDING. GOVERNOR ALBERT STRAUSS. VICE GOVERNOR ADOLPH C. MILLER CHARLES S. HAMLIN HENRY A. MOEHLENPAH Ju;.'10 9, 1920. St.l207 SUBJECT: Closing of books on June 30, 1920- Dear Sir: n1e Boar~ requests that the books of all Federal Reserve :Banl:s be closed ::c. .Tur10 30, 1920, an~ in ~rd.er to insure u.."'1ifo:cmi ty of practice tne C:ollowin_g, mathoa. of trsc:.tment of net .;arning::;, re- Res~rva Board.: 1. Cost of Federal B.es::>rva and. Federal Raserve Bank notes, 2.lsc of Furniture and E:Juipment: C.:..arge balance of accou;.:Lo as s:.. own by books on June 30 to current e:::_2::;~"'---' a.cco-c:.::.. "G. 2. Raservc for ~·axes. Set asid.e sufficier:t taxes accrued.. c.il10;.;ll'vs to tal:e care of all 3. E:x:traordin.ar;t c::-.a.rge-off;; or Depreciatio~:. AllOWal'lCe$: Defer all action re 0 arcdng extraordinary Cl1arge.- offs or U..:J].Jreciation allowa.::w.as incluciin,; d.epreciati on cb.arg,es O<"l accot~.;:l:. of 0a11k premises, until closing of boolcs or. December )1, 1920. 4. Distribution of Net Earnir.. ;ss after i'uakin; Allovvarice fgr Di vii~nci. P .;:,.zn-..:m t s . (a) Trc:rJ.sfer 10 pel~ cent to p:co:fit ::c.:-.:.ci loss account. (b) T:..·ansf~:.~ balance o! 90 pa:..· c:mt to sur:plus account, :::.:;rovided t::le sur;;lus accou.1:t woL:",ld not as a result exceed t~1e brulk 1 s subs c:c i bed. capital, in which case only sucl1 amount sl1ould. be transferred as is n.:;cessary to increass ": e normal surplus to an ~.ount e-1ual ·~o ·:~:::.a 02,lllc 1 s subscribed capital. (c) Transfer 90 per cent of reu-.ainu.-.:;c. 1 ii' any, to account "Reservad for Govern;.,,;;nt Franci1ise Tax", a.rlci 10 per cent to an accou.!.t on t~w books of your bank to be k~;.ovm as "Supor-,-;,:.~cplus 11 • I St. 1207 .... 2 - It is the Board's desire that the nor~al surplus account of each Federal Reserve Bank, i.e., the surplus account which, according to law, may reach a maxi~ equivalent to the bank's subscribed capital, be kept separate on the bank's books from the "Super-surplus"' to be accl.llllulated from net profits retained by the bank after the normal surplus account shall have reached 100 per cent of the bank's subscribed capital. On Form 3tl- and in all published statements, however, the two accounts, surplus and super-surplus, should be combined under the general heading 11 Surplus 11 • May we request that you present this letter to your Board of Directors at an early date so that their resolution in the rratter of closing the books and payment of dividends on June 30, together with a statement of the estima.ted amount of gross and net earnings, also of dividends accrued for the six months ending June 30, 1920, may reach the Board not later than June 26, 1920. Very truly yours, Governor (Copy of this letter sent to Chairman of each F. R. B~nk.)
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