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A W . P . G . H A R D I N G , GOVERNOR EX O F F I C I O M E M B E R S E D M U N D P L A T T , V I C E GOVERNOR ADOLPH C. MILLER DAVID F . H O U S T O N SECRETARY OF THE TREASURY CHAIRMAN C H A R L E S S . HAMLIN FEDERAL RESERVE BOARD J O H N SKELTON WILLIAMS COMPTROLLER OF THE EL)RRBN«Y D.C.WILLS R . G . E M E R S O N , ASSISTANT TO GOVERNOR W . W . H O X T O N . SECRETARY ADDRESS REPLY TO F E D E R A L R E S E R V E B O A R D WASHINGTON W . L . E D D Y , ASSISTANT SECRETARY W . M. I M L A Y , FISCAL AGENT November 19, 1920. st.1576 Subject: Equipment for Printing Federal Reserve Notes* Dear Sir: The Treasury Department has advised the Board that, i n rendering b i l l s for expenses connected with the printing of Federal Reserve notes since the organization of the Federal Reserve Banks, no charges have been included t o cover depreciation of the printing presses and other equipment used in printing such notes* It i s now necessary to buy additional equipment for printing such notes, and in accordance with Section l 6 of the Federal Reserve Act which provides that the expenses necessarily incurred i n executing the laws r e l a t i n g to the procuring of Federal Reserve notes and a l l other expenses i n cidental to t h e i r issue and retirement shall be paid by the Federal Reserve Bank, the Treasury Department has requested the Federal Reserve Board to levy an assessment of $540,000 upon the Federal Reserve Banks t o cover the cost of the additional equipment* The Treasury s t a t e s that a charge should be l e v i e d against the Federal Reserve Banks on account of depreciation i n equipment used i n p r i n t ing Federal Reserve notes since the organization of the Federal Reserve Banks, amounting to $193,035.96, or at the rate of $1.11 per thousand sheets of notes printed, a l s o that i t estimates that the depreciation cost during the next three years, owing t o the increase i n the cost of equipment, w i l l be at the rate of $1.46 per thousand sheets. The difference between the $ 5 4 0 , 0 0 0 assessment and the $193,035.9& representing depreciation during the past f i v e years, or $346,964.04 w i l l therefore represent the depreciation to be charged off a s new Federal Reserve notes are printedIn the following table w i l l be found the amount of the assessment against each bank on account of depreciation of printing equipment pripf to June 30, 1920, which should be charged to current expense on December j $ , 1920 and the amount of the additional assessment for new equipment together with the method of arriving a t the two amounts. St. 157b _9_ Federal Reserve Bank Number of Sheets Printed to June 30, 1920 :Percent :Printed -for each : Bank 8,b3 14, 994,100 Boston 29.16 50,657,300 Ne»v York 8.21 Philadelphia 14,269,300 6.79 11,797,300 Cleveland 4.70 8,167,600 Richaond 5.65 9,805,300 Atlanta 24,140,200 13-89 Chicago 9,u66 # 400 5.45 St. Louis 3 . £5 5,653,600 Minneapolis 4.00 8,105, 000 Kansas. City 3.29 5,715,600 Dallas 6.J2 San Francisco 10,973,700 173.748.400 100.00 Total r Assessment for : :Additional Total :Depreciation 1915- •Assessment for Assessment New :192C to be charged Equipment :to Current Expenses :on December 31, 1920 $46,602 $29,943.00 $15,659.00 157)464 101,174.71 56,289-29 44,334 28,435.75 15,848.25 36,666 23,558.8b 13,107.14 25,380 16,307.31 9,072.69 30,510 19,603.47 10,906.53 75,0C6 48,193-30 26,612.70 29,430 18,909.54 10,520.46 17,550 11,276.33 6,273.67 25,164 16,168.52 8,995.48 17,766 11,415.12 6,350.88 14.128 21,928.15 12,199.87 34b. 964.04 540,000 193,0^.% It w i l l be noted that in arriving at the assessment for new equipment, which i s to be taken up on your books and amortized i n t o current e x f t e n s e 3-s new notes are printed, we have assumed that the notes print© or each bank in the future w i l l bear the same relation to the t o t a l number prin e for the System a s obtained during the past f i v e years. An adjustment of the amounts of the additional assessment for new .equipment w i l l be made between Federal Reserve Banks at a future date if made necessary by changes in the percentages of notes printed. The amount of the assessment for depreciation prior to June 30, 1920, should be charged to current expense on December 31, 1920> and the balance of the assessment,'set up as an asset account on the bank s books and carried on the balance sheet, form 34, against the caption .Equipment for printing Federal Reserve notes". This l a t t e r amount should be amortized into current expenses at the rate of $1.46 per thousand sheets of Federal Reserve notes printed for the bank subsequent to June 30, 1920, such amortization charges to current expense to be made at the same time as are the charges covering the cost of printing Federal Reserve notes. Relative to charges to current expenses which have been made on account of notes printed since June 30, 1920, the depreciation charge of $1-46 for eachoas thousand sheets of notes should be immediately made to current expenses to cover depreciation on equipment since June 30« Please deposit the total amount chargeable against your bank in the General Account, Treasurer, U. S-, on your books, and issue C/D on form 1, National Banks, i o r credit of "Salaries and Expenses, Federal Reserve Board, Special Fund", reimbursements, sending duplicate C/D to the Federal Reserve Board. To Chairmenof Very truly yours, G o v e r n o r . a l l Federal Reserve Banks.
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