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FEDERAL RESERVE BOARD WASHINGTON January 29, 1924. St. 5915. SUBJECT: Federal Reserve Branch Banking. Dear S i r : In connection with the. work of the Econony and E f f i c i e n c y Committee, which has now been under way for nearly two years, the Board is making a study of the branches of the Federal Reserve Banks, with s p e c i a l reference t o the p o l i c y which should be pursued in deciding upon the extent and character of the work that should be permanently performed at the branches and t o the determination of the additional cost entailed by the maintenance of the branches. At the present time some of the branches are operated on the so-called memorandum plan while others are permitted to conduct p r a c t i c a l l y a l l of the functions incident t o the operation bf the Federal reserve banks and ate therefore known a& "full-fledged" branches. All of th6 branches, however, are handling p r a c t i c a l l y the sane c l a s s of operations, with a few . exceptions r e l a t i n g principally t o earning a s s e t s , dep o s i t s and f i s c a l agency transactions, (thd c o s t of which i s comparatively small), as w i l l be noted f^dm Table 1 in the Outline of Federal Reserve Branch Banks covering t h e i r powers and functions and the character and volume of work handled which was issued by the Board i n June, 1922. In order that the Board may be in possession of data e s s e n t i a l t o the coupletion of i t s study in regard t o the operation of Federal reserve bcancn banks i t w i l l be appreciated i f you w i l l furnish i t at your e a r l y convenience with a report containing the following information: A, Statement, based on functional expense reports, showing the amual | o s t of maintaining: each of the 21 functions l i s t e d on page 32 of the quarterly functional expense report form E, together with figures i n a p a r a l l e l column showing the estimated net saving that cculd be e f f e c t e d i f the br&nch were d i s c o n t i n ued and the work taken over by the head o f f i c e . 3. Statement til t o whether or not in your opinion and that of the o f f i c e r s of the bank aiy one or more of the functions now being performed by the branch could be disc ait inaed and the work taken over by the head o f f i c e without slowing up the work of member banks t o a greater extent than would be warranted by the saving to be effected in the expenses of the Federal reserve banks, together with an estimate of the probable annual saving. C. Statement expressing the ©pinien of your Board of directors as to whether any of your branches or any of the functions now being performed by them should be discontinued• In addition t o the information s p e c i f i c a l l y requested we shall a l s o welcome a f u l l expression of your views regarding any phase of Federal reserve branch banking which you. think should be considered by the Board, e s p e c i a l l y as t o the d e s i r a b i l i t y of somewhat broadening the functions of Federal reserve branch banks. Very truly yours, Walter L. Eddy, Secretary. LETTER TO CHAIRMEN AT AM, FEDERAL RESERVE BATIKS BKKPT BOSTON AND PHILADELPHIA.
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