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346 FEDERAL RESERVE BOARD WASHINGTON address official correspondence t o t h e federal reserve board X-9022 November 17, 1934* Dear S i r : The Board r e c e n t l y r e c e i v e d a l e t t e r from an a p p l i c a n t f o r an i n d u s t r i a l l o a n under S e c t i o n 13b of t h e F e d e r a l Reserve Act s t a t i n g t h a t he had r e c e i v e d a b i l l from t h e F e d e r a l r e s e r v e bank t o which t h e a p p l i c a t i o n was s u b m i t t e d , f o r s e v e r a l hundred d o l l a r s , r e p r e s e n t i n g t h e charge made by an o u t s i d e f i r m of a u d i t o r s f o r making an examinat i o n i n connection with the a p p l i c a t i o n . The a p p l i c a n t f o r t h e l o a n s t a t e s t h a t he e i t h e r overlooked e n t i r e l y a p a r a g r a p h i n t h e bank 1 s a p p l i c a t i o n form r e l a t i n g t o payment of expenses, or e l s e took i t f o r g r a n t e d t h a t when he f u r n i s h e d a f u l l d e t a i l e d r e p o r t by a u d i t o r s of r e c o g n i z e d s t a n d i n g t h e r e would be l i t t l e , i f any, expense involved f o r further investigation. A f t e r c o n s i d e r i n g t h e correspondence i n t h i s c a s e , and t h e r e p l i e s t o t h e Board 1 s t e l e g r a m of October 12, 1934, Trans 2124, i t i s f e l t t h a t , i n order t o avoid m i s u n d e r s t a n d i n g s , i t would be d e s i r a b l e f o r t h e F e d e r a l r e s e r v e bank b e f o r e u n d e r t a k i n g any i n v e s t i g a t i o n or examination i n c o n n e c t i o n with an a p p l i c a t i o n f o r a loan under s e c t i o n 13b which may i n v o l v e expense t o t h e a p p l i c a n t t o a d v i s e such a p p l i c a n t as t o t h e b a n k ' s p o l i c y w i t h r c s p e c t t o t h e payment of t h e expense of ' 347 -2- X-9022 such i n v e s t i g a t i o n or examination and t o give t h e a p p l i c a n t an e s t i m a t e of t h e amount of t h e charges i t w i l l be expected t o pay wherever i t i s p o s s i b l e t o do s o . I t does n o t appear t o be s u f f i c i e n t t o r e l y upon a p r i n t e d s t a t e m e n t i n t h e a p p l i c a t i o n form, s i n c e such a s t a t e ment may be overlooked or n o t f u l l y a p p r e c i a t e d by t h e a p p l i c a n t . Very t r u l y y o u r s , -fafUAXtA) Chester M o r r i l l , Secretary. TO TEE CHAIRMEN OP ALL F. R. BAlKS.
@FedFRASER