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F E D E R A L RESERVE BOARD WASHINGTON X-3051 February 2 1 , 1921. SUBJECT: F e d e r a l B e s e r v e L e a s e d Wire System, Dear S i r : The F e d e r a l R e s e r v e Board h a s b e e n a d v i s e d by t h e American Telephone and Telegraph Company t h a t t h e s o - c a l l e d government r a t e s f o r t h e l e a s e of t h e main l i n e s of t h e F e d e r a l R e s e r v e Leased Wire System w i l l be d i s c o n t i n u e d on J u l y 1 , 1 9 2 1 , and t h a t t h e r e a f t e r t h e r e n t a l charged w i l l be on t h e b a s i s o f commercial r a t e s which a r e 200fo o f t h e r a t e s b e i n g p a i d a t t h e p r e s e n t timeThe c o s t o f t h e F e d e r a l R e s e r v e Leased Wire System t h e r e f o r e w i l l be i n c r e a s e d about $ 1 0 0 , 0 0 0 p e r annum J u l y 1 , 1921. I n v i e w of the crowded c o n d i t i o n of t h e Leased Wires and t h e i n c r e a s e d c o s t o f the Wire s y s t e m which i s s o o n t o t a k e e f f e c t , the Board r e c e n t l y made an a n a l y s i s o f the b u s i n e s s r e c e i v e d arid d i s p a t c h e d a t the Washington Telegraph o f f i c e . I t was found t h a t a c o n s i d e r a b l e p e r c e n t a g e o f t h e b u s i n e s s c o u l d have been forwarded a s s a t i s f a c t o r i l y by m a i l , e s p e c i a l l y t o and from t h o s e Reserve Banks which a r e o n l y an o v e r n i g h t d i s t a n c e from Washington, and t h a t many of the m e s s a g e s c o u l d h a v e b e e n much more b r i e f and c o n c i s e . A c c o r d i n g l y , the s e v e r a l D i v i s i o n s of t h e Board were i n s t r u c t e d t o economize a s much a s p o s s i b l e i n t h e u s e of t h e w i r e s . A s i m i l a r s u r v e y was made o f 12ae Treasury b u s i n e s s a t t h e same time and c o r r e s p o n d i n g i n s t r u c t i o n s h a v e b e e n i s s u e d by t h e Treasury t o i t s v a r i o u s D i v i s i o n s . -f n v i e w o f t h e a b o v e , t h e Board r e q u e s t s t h a t you b r i n g t o toe a t t e n t i o n o f t h e o f f i c e r s and employees o f your Bank, t h e n e c e s s i t y o r e s t r i c t i n g t h e u s e of t e l e g r a p h w i r e s t o b u s i n e s s r e q u i r i n g imm e d i a t e communication, and the d e s i r a b i l i t y of wording messages i n conc i s e language. Very t r u l y y o u r s , G o v e r n o r . TO CHAIRMEN OF ALL FEDERAL RESERVE BANKS
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