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FEDERAL RESERVE BOARD WASHINGTON X-3396 M a y g, 1 9 2 2 . SUBJECT: Reimbursement of Fiscal Agency Expenses, Dear Sir: At the conference of Governors of the F e d e r a l Reserve Banks recently held in Washington, there was ref e r r e d t o it f o r c o n s i d e r a t i o n a l e t t e r f r o m t h e U n d e r S e c r e t a r y o f t h e T r e a s u r y , a c o p y o f w h i c h is e n c l o s e d f o r your information. The conference requested the Federal Reserve Board, in b e h a l f of the F e d e r a l R e s e r v e Banks, to a d v i s e t h e Treasury that the banks will submit estimates of expenses and w i l l ask for reimbursement. The Secretary of the T r e a s u r y h a s b e e n a d v i s e d t h a t t h i s w i l l b e d o n e . J u l y 1, 1 9 2 2 has b e e n fixed b y the Treasury as the date f r o m w h i c h the reimbursements will be made. Y o u are requested to have m a d e u p a n d f o r w a r d to t h e B o a r d at y o u r e a r l y c o n v e n i e n c e a list o f a l l j u n i o r o f f i c e r s or m a n a g e r s , h e a d s o f d i v i s i o n s a n d e m p l o y e e s w h o s e t i m e is d e v o t e d e n t i r e l y t o f i s c a l a g e n c y work, together w i t h a statement of the salary p a i d in e a c h case. T h i s i n f o r m a t i o n w i l l b e t r a n s m i t t e d to t h e T r e a s u r y Department. T h e T r e a s u r y w i s h e s it u n d e r s t o o d t h a t i n m a k i n g reimbursement there will be no p r o v i s i o n m a d e for general s u p e r v i s i o n or overhead, thus following the precedent e s t a b lished during the time w h e n fiscal agency expenses were reimbursed. Very truly yours, G o v e r n o r . C H A I R M E N O F A L L F.R.BANE'S COPIES TO GOVERNORS C O P Y THE UNDERSECRETARY OF THE TREASURY Washington M a y 1, 1 9 2 2 . X-339_6a. ffy d e a r G o v e r n o r : This will confirm the statement w h i c h I h a v e several times made orally to y o u and other m e m b e r s of the F e d e r a l Reserve B o a r d that, in v i e w of the e x t e n s i o n o f t h e a p p r o p r i a t i o n f o r e x p e n s e s o f l o a n s a n d t h e p r o b a b i l i t y t h a t at l e a s t s o m e of the Federal Reserve Banks w i l l not b e a b l e u n d e r present c o n d i t i o n s to e a r n e n o u g h to p a y e x p e n s e s a n d d i v i d e n d s w i t h o u t s p e c i a l i n v e s t m e n t s in G o v e r n m e n t s e c u r i t i e s f o r that raking purpose, the Treasury now stands ready, u p o n request through the F e d e r a l R e s e r v e Board, to r e i m b u r s e the F e d e r a l R e s e r v e Banks for necessary fiscal agency expenses. The Treasury will b e p r e p a r e d to d i s c u s s w i t h t h e F e d e r a l R e s e r v e B o a r d , o r w i t h the Federal Reserve Banks individually, as m a y b e desired, a n y d e t a i l s r e l a t i n g to r e i m b u r s e m e n t f o r f i s c a l a g e n c y e x p e n s e s , w i t h p a r t i c u l a r r e f e r e n c e to t h e d a t e s from, w h i c h t h e T r e a s u r y w i l l r e s u m e r e i m b u r s e m e n t . It is u n d e r s t o o d , o f c o u r s e , t h a t if t h e T r e a s u r y is t o m a k e r e i m b u r s e m e n t f o r fiscal agency expenses the Federal Reserve B a n k s , r n t h the coo p e r a t i o n o f t h e econonqy a n d e f f i c i e n c y c o m m i t t e e o f t h e Federal Reserve Board, w i l l make every effort to k e e p fiscal a g e n c y e x p e n s e s d o w n to t h e m i n i m u m , a n d t h a t t h e T r e a s u r y w i l l i t s e l f h a v e t h e r i g h t to e x e r c i s e g e n e r a l s u p e r v i s i o n o v e r these expenditures. Yours very truly, ( S i g n e d ) S« P - G i l b e r t , J r . , Under Secretary. H o n . YL P. G . H a r d i n g , Governor, Federal Reserve Board, W a s h i n g t o n , D . C.
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