The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
381 B O A R D OF G O V E R N O R S DFTHE FEDERAL RESERVE SYSTEM WASHINGTON A D D R E S S OFFICIAL C O R R E S P O N D E N C E TO T H E B O A R D X-9575 November 27, 1955. SUBJECT: Federal Reserve notes Dear Sir: Regulation "0", series of 1915, as amended, entitled "Regulations for the guidance of Federal Reserve Agents in the matter of issuance and redemption of Federal Reserve notes", is hereby revoked as of the close of December 2, 1955, and revised instructions on this subject, effective at that time follow. Early in May of each year the Board will furnish to each Federal Reserve agent a statement showing the stock by denominations of Federal Reserve notes of his Federal Reserve bank at the Bureau of Engraving and Printing, the amount by denominations of such notes in process of printing, and an estimate of the amount of Federal Reserve notes that should be printed during each of the next two fiscal years. Upon receipt of the Federal Reserve agents' recommendations with respect to such estimates, the Board will place a printing order with the Comptroller of the Currency for such amount of each denomination of Federal Reserve notes as is regarded necessary to meet estimated requirements for the following fiscal year, and will also advise the Bureau of Engraving and Printing of the probable requirements for such notes for the succeeding fiscal year. X-9375 —2— Requests for the shipment of Federal Reserve notes from Washington shall be submitted to the Board on Form 45 or by telegram confirmed by written request on such form. Requests for the ship- ment of Federal Reserve notes shall be signed by the Federal Reserve agent or by an Assistant Federal Reserve agent. Federal Reserve notes may be issued to the Federal Reserve bank by the Federal Reserve agent on written application signed by an officer of the Federal Reserve bank, authorized by the Board of Directors or the Executive Committee to sign such application, provided collateral eligible, under the provisions of the Federal Reserve Act, as security for Federal Reserve notes is pledged with the Federal Reserve agent by the Federal Reserve bank in an amount at least equal to the amount of Federal Reserve notes issued to the bank. The Federal Reserve agent, acting for the Board of Governors of the Federal Reserve System, may at any time call upon the Federal Reserve bank for additional collateral to protect the Federal Reserve notes issued, to such bank. The Federal Reserve Agent may per- mit the Federal Reserve bank: to make substitutions in collateral held by him as security for Federal Reserve notes provided the amount of the collateral so substituted is at least equal to the amount of the collateral withdrawn. If at any time the amount of collateral held by the Federal Reserve agent as security for Federal Reserve notes is in excess of the amount of such notes outstanding, the Federal Reserve agent may permit the Federal Reserve bank to withdraw such excess collateral or any portion of such excess. -5- X-9375 Federal Reserve notes unfit for further circulation received by a Federal Reserve bank shall be canceled and cut longitudinally by the Federal Reserve bank and the uppers and lowers forwarded on separate days to the Treasurer of the United States. The amount of unfit notes of each other Federal Reserve bank forwarded to the Treasurer of the United States should be telegraphed to the Board, code CHRISTIAN, for credit in the Interdistrict Settlement Fund. Each Federal Reserve agent shall authorize the Treasurer of the United States by power of attorney to turn over to the Comptroller of the Currency for destruction all unfit Federal Reserve notes of the Federal Reserve bank to which such Federal Reserve agent is accredited which are received by the Treasurer of the United States for the account of such Federal Reserve agent. Fit notes of other Federal Reserve banks shall be forwarded promptly to the bank through which they were issued, and on the date of shipment the amount of such notes of each Federal Reserve bank shall be telegraphed to the Board, code CHEMICALLY, for credit in the Interdistrict Settlement Fund. The Federal Reserve Act requires that a gold certificate reserve be maintained against Federal Reserve notes equal to not less than 40 percent of the amount of such notes in actual circulation. If at any time the gold certificate reserve required by law to be held by a Federal Reserve bank against Federal Reserve notes in actual circulation falls below forty percent, the Federal Reserve agent shall X-9575 at once notify the Board of Governors of the Federal Reserve System, and thereupon, until otherwise directed by the Board of Governors of the Federal Reserve System, a graduated tax upon such deficiency as provided in Section 11(c) of the Federal Reserve Act shall be established and shall be computed as follows: Wnon such reserve falls below forty percent, but is not less than thirty-two and one-half percent, the tax upon the deficiency shall be at the rate of one-tenth of one percent per annum; When such reserve falls below thirty-two and one-half percent, but is not less than thirty percent, the tax upon the entire deficiency below forty percent shall be at the rate of one and six-tenths percent per annum; When such reserve falls below thirty percent, but is not less than twenty-seven and one-half percent, the tax upon the entire deficiency below forty percent shall be at the rate of three and onetenth percent per annum; and so on, increasing the tax at the rate of one and one-half percent per annum with each further deficiency in reserves amounting to two ana one-half percent, or any fraction thereof. As at close of business each day the Federal Reserve Agent shall submit a statement to the Board on form F.R.A. 5, covering all issues and retirements of Federal Reserve notes. Very truly yours, TO ALL FEDERAL RESERVE AGENTS Chester Morrill, Secretary.
@FedFRASER