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FEDERAL RESERVE BOARD ^ WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO ^ 7629 THE FEDERAL RESERVE BOARD October 5, 1933. SUBJECT: P e r m i s s i o n t o Member Banks i n O u t l y i n g D i s t r i c t s of Reserve and C e n t r a l Reserve C i t i e s t o Carry Reduced R e s e r v e s . Dear S i r : The Board has r e c e n t l y reviewed i t s procedure r e l a t i n g t o t h e g r a n t i n g of p e r m i s s i o n t o member banks i n o u t l y i n g d i s t r i c t s of c e n t r a l r e s e r v e and r e s e r v e c i t i e s t o c a r r y reduced r e s e r v e s , as a u t h o r i z e d b y s e c t i o n 19 of t h e F e d e r a l Reserve Act, and has decided not t o r e q u i r e (as provided i n i t s l e t t e r X-3977 of February 26, 1924) t h a t i t s h a l l be a c o n d i t i o n p r e c e d e n t t o t h e f i l i n g of an app l i c a t i o n by a member bank f o r r e d u c t i o n i n i t s r e s e r v e r e q u i r e m e n t s t h a t t h e a p p l i c a n t s h a l l have been a member of t h e F e d e r a l Reserve System and i n o p e r a t i o n as such f o r a p e r i o d of a t l e a s t one y e a r p r i o r t o t h e d a t e of such a p p l i c a t i o n # As a m a t t e r of g e n e r a l p o l i c y , t h e Board i s d i s p o s e d t o g r a n t p e r m i s s i o n t o any member bank l o c a t e d i n an o u t l y i n g d i s t r i c t of a c e n t r a l r e s e r v e or r e s e r v e c i t y , as d e f i n e d i n R e g u l a t i o n D, t o carryreduced r e s e r v e s , p r o v i d e d t h e c h a r a c t e r of i t s b u s i n e s s i s t y p i c a l of banks l o c a t e d i n and s e r v i n g p r i m a r i l y o u t l y i n g communities i n such c i t i e s . I n s u b m i t t i n g t h e a p p l i c a t i o n of a member bank f o r p e r - m i s s i o n t o c a r r y reduced r e s e r v e s , however, a f u l l s t a t e m e n t should - 2 — X-7629 be f u r n i s h e d of t h e f a c t s upon which your board or e x e c u t i v e comm i t t e e bases i t s recommendation* w i t h p a r t i c u l a r r e f e r e n c e t o t h e l o c a t i o n of t h e bank and t o t h e c h a r a c t e r of b u s i n e s s conducted by i t and by o t h e r banks l o c a t e d i n t h e same g e n e r a l neighborhood. In t h e review of the s i t u a t i o n as of the end of each y e a r , i n accordance w i t h t h e Board*s l e t t e r X-4739 of December 4, 1926, i t i s r e q u e s t e d t h a t , i n a d d i t i o n t o such o t h e r d a t a and comments as t h e agent may deem i t d e s i r a b l e t o submit, t h e r e be f u r n i s h e d t h e f o l l o w i n g i n f o r m a t i o n f o r each bank i n l i e u of t h a t s p e c i f i e d i n t h e letter referred to: 1. Net demand d e p o s i t s * 2* Time d e p o s i t s * 3. Bank d e p o s i t s (items 2 and 3 of Schedule J , item 4 i n Schedule K and item 2 i n Schedule L, of c a l l r e p o r t ) * 4. Total d e p o s i t s * 5. Vault cash* 6* Amount of d e b i t s t o i n d i v i d u a l d e p o s i t accounts f o r t h e four-week p e r i o d ending on t h e l a s t Wednesday i n December f o r each bank t h a t r e p o r t s d e b i t f i g u r e s t o t h e Federal r e s e r v e bank. 7• Whether t h e r e has been any change, s i n c e t h e p r e v i o u s annual review, i n t h e g e n e r a l c h a r a c t e r of t h e bank* s business* 8. Distance of t h e bank from what i s g e n e r a l l y regarded as t h e downtown b u s i n e s s and f i n a n c i a l d i s t r i c t of the city. * As of t h e l a s t c a l l date i n t h e year • I t i s a l s o r e q u e s t e d t h a t i n t h e annual r e v i e w c o n s i d e r a t i o n be given t o t h e q u e s t i o n whether t h e r e has been such a change i n t h e - 3 - X-7629 d i s t r i c t i n which any bank having p e r m i s s i o n t o c a r r y reduced r e s e r v e s i s l o c a t e d t h a t i t might no l o n g e r be r e g a r d e d as an o u t l y i n g d i s t r i c t , and t h a t a p p r o p r i a t e comment t h e r e o n be i n c l u d e d i n your l e t t e r t o t h e Board. Very t r u l y y o u r s , }r)<hsu Chester M o r r i l l , Secretary. TO ALL FEDERAL RESERVE AGENTS.
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