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530
EX OFFICIO MEMBERS
DAVID F. HOUSTON
SECRITARY C')P' THE TREASURY
• CHAIPAN
JOHN SKELTON WILLIAMS
COMPTROLLER OF THE CURRIMCY
FEDERAL RESERVE BOARD
W. P. G. HARDING, GOVERNOR
ALBERT STRAUSS, VICE GOVERNOR
ADOLPH C. MILLER
CHARLES S. HAMLIN
HENRY A. MOEHLENPAH
W. T. CHAPMAN, SECRETARY
R. G. EMERSON, ASSISTANT SECRETARY
ADDRESS REPLY TO
FEDJ::RAL RESERVE BOARD
W. M.IMLAY,FISCAL AGENT
WASHINGTON
June 29 , 1920 •
Subject:
X·l967
Proposed Treasury Regulations Regarding
the Replacement or Redemption of U.S.
Paper Currerey.
Dear Sir:There is enclosed herewith copy of proposed regulations
to be issued by the Treasury Department relative to the replacement or redemption of United States paper currency b1
the Federal -Reserve Banks.
It is the desire of the Treasury Department to issue at
an early date regulations governing this phase o£ the work to
be performed by the Federal Reserve Banks as fiscal agents of
the United States, but before doing so it would like to have
an op:portuni ty of considering any suggestions which the Federal
Reserve Board and the Federal Reserve Banks may have to make
with respect thereto. It is requested therefore that the
matter be given prompt consideration by the proper officials
of your bank and that the Board be advised of any comrents or
suggestions that they may have to offer with respect to the
proposed regulations.
Very truly yours,
Enclosure.
Governor.
..
To Chairman of all F .. R. Bmks.
531
INSTRUCTIONS FOR THF. TREftSURER OF THE UNITED
STP.TES, FEDERPL RESERVE BPNKS, FISCPL fiGENTS
OF THE UNIT'ED STPTES, AND Ol'fl"ERS CONCERNED t
WITH RESPECT TO REPLP.CEMENT OR REDE\1PTION OF
UNITED ST /ITES PfiPER CURRENCY.
The .Act of Congress approved
1.
May
29, 1920, making appropriations
for the legislative, executive and judicial expenses of the Government
for the fiscal year ending June
30. 1921, and for other
p~oses,
(PUblic
No~ 231 - 66th Congress), directs the discontinuance of the offices of
the several .Assistant Treasurers of the United States, on or before July
l, 1921, and with respect to the disposition of the duties and functions
performed by the P.ssistant Treasurers authorizes the Secretary of the
Treasury to utilize any of the Federal Reserve Banks, acting as depositaries or fiscal agents of the United States.
2.
In anticipation of a final discontinuance of the several
sub~
treasuries and pursuant to the authority above referred to and to
authority given in Section
15 of the Federal Reserve Act approved
1
December 23, 1913, and in order to furnish improved facilities for the
'pub lie, Federal Reserve Banks, as fiscal agents of the United States t
are authorized and instructed, beginning July l, 1920, to receive for
the account of the Treasurer of the United States, United States notes,
Treasury notes of 1890, gold certificates and silver certificates, and
to make replacements or redemptions thereof.
532
X-1967 a
-2-
Replacement of United States Raper currency unfit for .further circu-.
lation. -- ?rocedure in Federal Reserve Banks.
3.
Any person presenting United States paper currency mrl'i t for
further circulation is entitled to receive therefor. V'll:en demanded,
United States pap3r currency of the sane kind fit for circulation in
so far as such currency is available..
No Federal Reserve Bank is
authorized to receive for replacement paper currency fit for circulation.
In making replacements of unfit currency, if denominations
other than those presented are recpested, such requests should be complied with so far as possible,.
4.
United States currency in the hands of Federal Reserve Banks
unfit for further circulation shall be assorted, canceled, cut and
shipped in accordance with the following procedure:
(a) ./ISsort py kind and denomination, and separate into packages of 100 notes (of the same kind and denomination).
(b) Strap each package ( 100 notes) lengthwise '""i th manila
(or similar) -paper, crosswise with colored paper, green
for United States notes, white for silver certificates,
yellow for gold certificates; ends of both lengthwise
straps to be secured with paste, cross straps to be pasted
full length ..
(c) On each cross strap place notation in duplicate above and
below ndddle line, indicating kind of money, denomination,
amount, counter 1 s initials and date of count • ani narre of
Federal Reserve Bank.
(d) Cancel -package with four holes (largest diameter thereof
not less than 1/2 inch) two above and two below middle line,
1~ inches from ends of package.
(e) ~ssemble in units of ten packages {i.e •• 1~000 notes)
and secure each firmly with manila- (or similar) paper strap,
placed longitudinally, the strap to be the width of the
533
.
·~
X-1967 a
-3-
notes and to be secured at the ends with paste. Four such
units shall be assembled, and, when cut in half as next provided, will form shipping units or bUndles (of 4,000 halfnotes each).
(f)
On the upper and lower respective edges of each package
of 100 notes place an identifying letter and number, the first
unit of 10 packages to be designated~. the second ~. the
third .Q, the fourth Q.. Each package within each unit to be
designated by a number, 1 to 10, inclusive. The sane marks
will accordingly a~ar on co-;:.-responding upper ani lower
edges of the same package. Cut in halves lengthwise, separating
uppers from lowers. 4o packages of uppers and the same number of
lowers ( of lOO half-notes each ) will then be marked as follows:
A- 1
J. - 2
p, -
3
ft - 4
A- 5
]l -
6
A- 7
A- 8
}
- 910
]l -
BBBBBBBBBB-
1
2
3
4
5
6
1
g
9
10
cccccccccc-
1
2
3
4
5
6
7
g
9
10
D- l
D-2
D - 3
D- 4
D- 5
D- 6
D- 7
D- 8
D - 9
D- 10
(g)
Place fiber board at top and bottom of each such bundle
(shipping unit of 4.ooo ha~f notes) of uppers and of corresponding lowers, and secure vvi th binding strap ..
(h)
To each bundle attach a colored label (on top and beneath
strap), green for United States notes, white for silver certificates, yellow for gold certificates, indicating kind of
money, denomination, amount (of whole notes), whether uppsr
or lower halves, bundle number and lot number, and name of
Federal Reserve Bank.
(i)
ftssemble all bundles for day 1s shipment, and to each kind
assign a lot number. Bundle numbers ( 4,000 half notes each)
begin with number 1 for each lot each day. Lot numbers for
each kind of money begin with No .. 1 July l ani continue in
series to June 30, and repeat. All package, bundle and lot
nunbers are duplicated for uppers and lowers •
.
(j)
Odd amounts of the larger denominations may be shipped in
packages of less than 4,000 half notes when necessary.
'•
534
X-1967 a
(k)
Determine contents of each mail :pouch, and th;; serial number and rotary number of lock to be attached to each :pouch.
Prepare two sets of shipping manifests, each in quadruplicate,
one set covering uppers and one set covering lowers, setting
forth the contents of each pouch in the day's shipment. as
follows:
Registry Lock
Serial No. :Rotary No.:Kind
Contents of Pouch
:tot No. :Package :Denom :J\mount : Total
Nos.
:of Item:J'mount ·
The original copy covering uppers shall be addressed to the
Treasurer of the United States, Redemption Division, and forwarded on the day of shipment ( see m ) by ordinary mail. The
duplicatA, which shall carry a receipt form to be executed
by the Treasurer acknowledging receipt of shipment, shall accompany the original. The triplicate shall be inclosed in
the :pouch bearing lowest rotary lock serial number. The quadruplicate shall be retained by forwarding bank.
·_,
The signed copy covering lowers shall be addressed to the Secretary of the Treasury, Division of Loans and Currency, and
forwarded on the day of shipment ( see m) by ordinary mail.
The duplicate, which shall carry a receipt fonn to be executed
by the Secretary of the Treasury acknowledging receipt of shipment, shall accompany the original.. The triplicate and quadruplicate as above.
(1)
Pll shipments shall be made by registered mail, in locked
:pouches, under rotary locks especially assigned, postage
to be :prepaid at fourtrrclass (:parcel :post) rates, with registration fee for each parcel :post unit, without :payment of war
tax.
(m) The lowers shall be addressed to The Secretary of the Treasury, Division of Loans 8l'ld. Currency. The U'Pt>ers shall be addressed to The Treasurer of the United States, Redemption
Division, but shell be forwarded not earlier than the dav succeeding the day the lowers shall have been forwarded •
..
535
X-1967-a
- 5-
5. Such shipments shall be charged in the account of the
Treasurer of the United States as a transfer of funds to the Secretary
of the
Treasury~
Division of Loans and Currency.
The charge shall be
made on the day the loNers are shipped 1 and shall be the face amount
of th3 whole notes.
No charge shall be entered when uppers are shipped.
Postage and registration fees paid oh canceled United States currency
forwarded will be reimbursed Federal Reserve Banks from the appropriation
"Contingent
Expenses~
vouchers, duly
Independent Treasury" upon rendition of appropriate
certified~
Secretary of the
Treasury~
at the end of each month 1 and forwarded to the
Division of Public Moneys.
Denomira t i onal Ex cha.~,;t.
6.
In so far as possible, requests for denominational exchanges
should be complied ·.ri th, even though the currency presented is fit for
circulation.
Receipt and Report~~~po Secretary of the Treasury, Division of
I,oa."1s ru1d QY,Q:..~'1CY.
7.
Immediately upon receipt of a shipment of lower halves, the
Division of Loans and Currency shall makJ inventory ther.;;of and the
duplicate copy of the manifest
~ill
be accomplishod and returned to
Federal Reserve Bank 1 and prescribed accounting reports shall be sent
to the Treasurer of the
notices of receipt
~to
~nited
~ith
the Cash Division and the Radomption Divis:l.on
of the Treasurer's Office.
..
States, Division of Accounts,
Subsequently1 in due course, examination
536
.
.
X-1967-a
- 6will be given the lower halves 1 and any errors found shall be reported
to the Treasurer of the United States for adjustment.
Upon completion
of examination of shipment and adjustment of errors., if any., destruction
schedules shall be prepared as required, advice sent the Treasurer of the
•
United States1 Redemption Division1 that the _particular shipment is ready
for destruction1 and upon confirmation by the Redemption Division the lot
shall ba delivered to the Destruction Committee.
Action by Treasurer of the United States,
8.
Rede~ption
Division.
Immediately upon receipt of a shipment of upper halves, the
'Redemption Division shall make inventory thereof., and shall accomplish
and return to Federal Reserve Bank thJ duplicate copy of manifest of
'.
shipment.
The Redemption Division shall make test counts of not exceed-
ing ten per cent of the upper halves received, except that upon receipt
of advice from the Division of Loans and Currency of an ferror discovered
in the examination of lo;vers) the package containing corresponding uppers
shall be examined for verific_:...tion and adjustment) if necessary 1 of·
error reported-
9. Upon receipt of advice from the Division of Loans and Currency
that a shipment is ready for delivery for d0stt".ucti:an1 the Redemption
Division shall report to the Division of Loans and Cu.crency any errors
discovered in
t~st
counts not previously reported by the Division of
Loane and Currency, and after adjustment 1 if necessary 1 the Redemption
Division shall arrange to deliver the upper halves to the destruction
...
- 7committee at the same time the corresponding lower halves are delivered
by the Division of Loans and Currency.
Shipments of nevv currency by Treasurer of the United States.
10;
As same may be available in the cash 1 the Treasurer of the
United States >vill ship ne.v currency (and any other paper currency in
hand fit for further circulation) to the Federal Reserve Banks in such
'
proportion as will provide as equitable a distribution thereof as possible.
Generally such shipments will be made in proportion to the receipts of
unfit currency from the respective banks.
All suCh shipments shall be
charged as a transfer of turds to the appropriate Federal Reserve Bank.
Other unfit paper currency received by the Treasurer of the United States.
''
ll.
In case of United States paper currency received by the Treasurer
of the United States for replacement '(other than from Federal Reserve Bank),
•
after verification of the shipment recoived, the amount thereof will be
confirmed to the appropriate Federal Reserve Bank as a transfer of funds 1
with appropriate instructions.
In case of a member bank, the Treasurer
will instruct that appropriate credit be given in reserve accaunt of such
member bank with Federal Reserve Bank.
In case of a non-member bank, or
private individual or concern, the Treasurer will instruct that currency
be shipped and charge4 to his account as a transfer of -funds..
The
Treasurer is authorized to give such instructions by NireJ to be confirmed
in '!riting1 and Federal Reserve Banks shall send appropriate ad.vice to
member banks of credits entered 1 and to others of currency shipped.
538
- 8-
12.
Except for strictly local transactions 1 the Treasurer of the
United States will discontinue direct shipments of fit currency in
exchange for unfit currency 1 and Nill make all shipments of available fit
notes to Federal Reserve Banks1 the purpose being to provide as equitable
a distribution as possible throughout the United States of paper currency
fit for circulation.
Distribution by Federal Reserve Banks of notes fit for circulation.
13,.
In making deliveries of notes fit for circulation1 :Federal
Reserve Banks shall deliver new currency and circulated currency in proportion to the stocks of each
available~
New notes 1 however1 shall always
be furnished when shipments are made to the insular possessions of the
United States.
Unfit paper currencx received at
14.
subtreasuries~
In case currency unfit for futher circulation is received by an
Assistant 'Treasurer of the United States 1 receipt therefor shall be
issued by the receiving Assistant
Treasurer on Form
1716~
Subtreasury
Service, payment for the same to be made by the Federal Reserve Bank or
Branch located in the same city ·Nith the subtreasury issuing such receipt.
Currency received for
redemption~
15. United States notes are redeemable in gold; Treasury notes
of 1890 are redeemable in gold or in standard silver dollars; gold
certificates are redeemable in gold; and silver certificates are redeemable in standard silver
...
dollars~
Request for redemption in coin should
..
539
- 9-
,
be discouraged so far as possible, but the right of redemption as
above stated is inherent in United States paper
demands therefor must be complied with.
currency~
and specific
Redemptions Nill be made by
Federal Reserve Banks in ordinary course, and tha Treasurer of the
United States will make replacement in appropriate coin on request
therefor by Federal Reserve Banks upon the surrender by them of United
States notes 1 gold certificates, or silver certificates.
16.
When Treasury notes of 1890 are recai~ed, they shall not
be reissued but shall be canceled and forwarded in regular course as
transfer of funds.
Transactions at Branches of Federal Reserve Banks.
17.
Upon request of any Federal Reserve Bank, approved by the
Federal Reserve Board, the Secretary will consider extending the
privileges of these instructions to any Branch of such Federal
R~serve
BankJ provided, however, Federal Reserve Banks maintaining Branches in
~·tlities
·.:vhere subtreasuries are no;v located shall make arrangement.s to
cGnduct transactions contemplated by these instructions prior to
June 30J 1921.
@FedFRASER