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. . FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL. CORRESPONDENCE TO THE FEDERAL. RESERVE BOARD X-5072 February 8, 1928. SUBJECT: Report by Federal Reserve Agents of violations of criminal statutes. Dear Sir: Certain questions have recehtiy be~n presented to tne Federal Reserve Board regarding th~ reporting of violations of the criminal provisions of Section 22 of the Federal Reserve Act arid Sections 5208 and 5209 of the Revised Statutes to tJ.1e United States bi~trict Attorney and to the Federal Reserve Bolird in accbrtlanoe with the Board's letter of April 4, 192~ (X~3683), The question was raised whether it is the desire of the Federal Reserve Board that Federal reserve agents report alleged violations of the ~riminal statutes mentioned, in the casa of nationll banks as well as in the case of State member ~ankS, Such violations are 1 in case of national banks, brought to tho kttentioh of the Comptroller of the Currency- biY national banlt examin~r~ and the facts in the . . cases reported are customarily transmitted both th~ United States District Attorney and the Department of Justice for appropriate action. If Federal reserve agents were instructed to report these violations in the case of national banks, ordinarily it would be merely a duplication of the work done by the CoiD?troller of the Currency and the national bank examiners. AccorQingly there seems to be no necessity for Federal reserve agents making such re~orts in the case of national banks. In addition there are some cases in which the Comptroller of the Currency reports the matter to the Attorney General, but at the same time suggests that no immediate action be taken because to do so might cause a run on the bank involved. To have duplicate repo~ts by Federal reserve agents in cases of this kind might lead to confusion and possibly injurious consequences to some of the national banks. However, in cases where information is received which might not otherTtise ~orne to the attention of the national bank examiner, such information should be promptly furnished him. The question was also presented whether it is the Board's desire when a Federal reserve agent receives through press reports or other unofficial sources notice of possible violations of the law, he should follow up the matter to to • .. -2- X-5072 ascertain the facts and make a report in the usual manner, or whether he should await the receipt of information through official sources. When the Federal reserve agent receivea knowledge of possible violations of law in connection with his official duties, he shoulO. immediately follow the matter up. Where, however, he receives his information from rumors, the Board believes that he shoul'd be given a wide discretion as to what action he should take. In :nany cases it would seem unnecessary to take action until the matter has come to his attention through official channels. In exceptional cases, ho•'l'ever, ''!here this facts are '.'!idely known and the matter is an important one, the Federal reserve agent should use sound discretion, and if he deems it advisable or appropriate should undertake to ascertain tho facts officialJ.y. By order of the Federal Reserve Board. Walter L. Eddy, Secretary. TO ALL F. R. AGENTS.
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