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FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO THE FEDERAL RESERVE BOARD X-7437 May 3 , 1933. SUBJECT: Cost of Examinations Under Section 404 of the Act of March 9, 1933, a s Amended. Dear S i r : There i s inclosed h e r e w i t h , f o r your informat i o n , a copy of a l e t t e r addressed to t h e A s s i s t a n t Federal Reserve Agent a t Chicago i n response t o h i s i n q u i r y as to whether a bank applying f o r a loan under S e c t i o n 404 of the Act of March 9, 1933, a s amended, should he a s s e s s e d the expense of an examination made "by a r e p r e s e n t a t i v e of the Federal r e s e r v e hank i n connection w i t h the a p p l i c a t i o n . Very t r u l y yours, Chester M o r r i l l , Secretary. Inclosure. TO AIL F . B, AGENTS EXCEPT CHICAGO, X-7427-a COPY May 1, 1933. Mr. C. S. Young, A s s i s t a n t Federal Reserve Agent, Federal Reserve Bank of Chicago, Chicago, I l l i n o i s . Dear Mr. Young: Mr. Paulger has brought to t h e a t t e n t i o n of t h e Board your l e t t e r of A p r i l 13 i n which you r e f e r t o s e c t i o n 404 of the Act of March 24, 1933, and ask whether a "bank applying f o r a loan under t h i s s e c t i o n should he assessed the expense of an examinat i o n by a r e p r e s e n t a t i v e of the Federal r e s e r v e bank. I t i s the view of the Board t h a t an a p p l i c a n t f o r a loan under s e c t i o n 404 of the Act of March 24, 1933, should r e imburse t h e F e d e r a l r e s e r v e bank f o r the a c t u a l expenses of an examination made by i t s r e p r e s e n t a t i v e s f o r t h e purpose of enabling i t to p a s s upon such an a p p l i c a t i o n u n l e s s the c o s t to t h e Federal r e s e r v e bank of such an examination be r e l a t i v e l y insignificant. In t h i s connection^ i t i s understood t h a t the Reconstruct i o n Finance Corporation has adopted t h e p o l i c y of r e q u i r i n g t h a t a p p l i c a n t s reimburse t h e c o r p o r a t i o n f o r the a c t u a l expenses of examinations n e c e s s i t a t e d by t h e i r a p p l i c a t i o n f o r l o a n s . Very t r u l y y o u r s , (S) Chester M o r r i l l Secretary.
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