Full text of Mimeograph Letters and Statements of the Board : Letter From Secretary Morrill re Payment of Interest on Deposits Pending Issue of Board's Regulation, Number X-7495, Volume 39, Page 27

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FEDERAL RESERVE B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD

X-7495
July 12, 1933.

Dear Sir:
There is attached hereto, for your information, a copy of a letter addressed "by the Board to
a national bank with regard to the issuance by that
"bank of new time certificates of deposit with an
agreement to pay interest thereon, pending the issuance of regulations "by the Federal Reserve Board
limiting the rates of interest which member banks
may pay on time deposits.
Very truly yours,

(Inclosure)

Chester Morrill,
Secretary.

To all Federal Reserve Agents.




X-7495-a

COPY.

July 12, 1953.

Dear Sir:
Your letter of June 26, 1933, inquiring whether your bank
may issue new time certificates of deposit and agree to pay interest
thereon pending the issuance of regulations "by the Federal Reserve
Board limiting the rates of interest which member banks may pay on
time deposits, has been referred to the Federal Reserve Board for
reply.
Pending the issuance of regulations on this subject by the
Federal Reserve Board, there is no legal reason why your bank may
not issue time certificates of deposit and agree to pay interest
thereon at the customary and usual rate; provided that such certificates comply strictly with the definition of time certificates of
deposit contained in the Federal Reserve Board's Regulation D, a copy
of which is inclosed for your information. In order to avoid any
misunderstanding with your depositors, however, it would be advisable
for you to place on each time certificate issued since June 16, 1933,
a notation to the effect that the rate of interest payable on the deposit represented thereby is subject to adjustment in accordance with
such regulations as the Federal Reserve Board may issue, pursuant to
the provisions of Section 19 of the Federal Reserve Act, as amended
by the Banking Act of 1933.

Inclosure.



Very truly yours,
Chester Morrill,
Secretary.