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EX-~ MEMBERS
W. P. G. HARDING, GOVERNOR
- - - - , VICE GOVERNOR
ADOLPH C. MILLER
WILLIAM G. MCADOO
CHARLES~LIN ~~
SECRETARY Of, fHE TREASURY
CHAIRMAN
.f'B
-.....<::.-·._.dl
JOHN SKELTON WILLIAMS
FEDERAL RESERVE BOARD
COMPTROLLER OF THE CURRENCY
WASHINGTON
J. A. BRODERICK, SECRETARY
L. C. ADELSON, ASSISTANT SECRETA~Y
W. T. CHAPMAN, ASSISTANT SECRETARY
W. M. IMLAY, FiSCAL AGENT
ADDRESS REPLY TO
FEDERAL RESERVE BOARD
SJptember 20 1 1918.
x-1216
SUBJECT: PAYMENT BY FEDEP.."l.L R<:SEiWE
BANKS OF EXPE:NSES INt'!!:D~:l~T
TO TRANSFERR OF C!JLFCNCX" .AliTD
SECURITIES PLEJG8D AS COLLA.'lEAAL~
TO AND FROM FEDERAL RESERVE BANKS.
("
I
Dear Sir:
Federal Reserve banks are now paying the cost of transportation
on Federal Reserve notes fron1 washington, and these notes are available
to banks located in Federal Reserve and Federal Reserve branch cities
without charge for delivery. The banks have also abolished their
service charges for collecting checks, and in many cases they are paying
all transportation charges in connection with the exchange of currency
for
as well as charges on currency forwarded by country banks
gold~
to offset debits made against them represented by the total footings
of letters containing checks for collection.
The Board has under
conside~tion
the propriety of extending
further facilities to member banks by having Federal Reserve banks ;ay
all charges incident to the transfers to and from the Federal Reserve
banks·of currency 1 and securities pledgedcor to be pledged as collateral
fOr loans.
This question was discussed at the meeting of the Federal
Advisory Council on the 17th instant and received the cordial support
of that Body.
The Board Will be pleased to receive from you an est:ina.te of the
probable cost (say for a two months period) to your bank if it should
absorb the entire expense involved in the plan outlined below:
X-~121 G
:159
'r
MEMBER BANKS! (a) Paynient cf all pos"tas;c,.. sxpresc:; 1 insurance, etc.,
incident to sh.i.pa:ents tr) anal. from member banks of
currency 1 collatetal noces and bills for rediscount,
and securities deposited as collateral to member bank
promissory notes and notes red1.acounted.,
(b) Payment of charges on all telegrams received from
or sent to member banks in connection with currenCYJo
exchange transierst lr.ans and deposit transactions.
NON-MEMBER BANKS WAINTAINING CLEARING ACCOUNTS
\~ITH
FEDERAL RESERVE BANKS:
(a) Payment of postage, insurance and expressage in
connection with shipments of currency in settlement
of clearing balances.
NON-MEMBER BANKS ON PAR LIST:
I
All postage in connection \nth remittances made to
cover collections ( to be provided for by enclosing
return stamped enveiope)
All expenses incident to shipments of currency to
Federal Reserve banks in payment of items sent for
cone cti on.
It is thought that the extension of the privileges above indicated
to member banks will remove the feeling that rriiny country banks have
that the Federal Reserve Ac~ discriminates against them in favor of the
banks in the larger cities~ and will at the sane time prove an added
stimulus to the state banks· to apply for rrembership.
Should the plan be adopted, the Board would, of course, reserve
the right to modify or rescind it at any ttme upon reasonable notice.
You are requested also to give the Board the benefit of your
opinion as to the expediency of the adoption of the proposed plan
by all Federal Reserve banks.
Very truly
yours~
Governor.
@FedFRASER