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FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO T H E FEDERAL RESERVE BOARD X A p r i l SUBJECT: Bear Comptroller of the issued to Comptroller provisions Act of March sections of conservators the of 9, the to of Currency national n a t i o n a l 1953), r e l a t i n g the and Bunk there Bank's Old has prepared banks 1935. re Conservation are inclosed Reserve Account, General Account, ary A s s i s t a n t s Conservators. pared by the Board's and Comptroller's s t a f f and the to o f f i c e with following the pursuant Act (Title herewith Conservator's Account, i n s t r u c t i o n s appointed Special .Account, the Currency L, rjrznQ 7 5 9 8 Sir: The be Regulations of Conservators. w to II copies of of John Mr. H. Mr. J.S.Walden, Mr. Robert Mr. Charles S. F. S i n c l a i r , S t r a t e r , S. J r . , Conservator's These sections assistance r e p r e s e n t a t i v e s of Parker, B.Dunn, of were Federal t o the Federal Philadelphia Reserve Cashier Bank of of the F e d e r a l Cleveland Reserve Federal Counsel t o the F e d e r a l Bank of A t l a n t a of Counsel to t h e Bank of C h i c a g o . the Deposit- members Counsel Bank of C o n t r o l l e r of t h e Bank of Richmond the Conservator's banks: Mr. to Reserve Reserve Federal Reserve preof reserve 129 X - 7 3 9 8 The sections the been approved by sary that i n s t r u c t i o n s the the Currency out of you promptly the f i n a l l y you with for c i t y by by wire as soon The Board in of Currency; both the by complete the these considers matter accordance of the The and have in is been f u r n i s h request banks of advise w i l l you to accordance t h e r e o f . it by desirable opening with the that and terms the Federal maintaining and herewith. t r u l y yours, Inclosure GOVERNORS OF ALL FEDERAL RESERVE B A M S . reserve accounts conditions Chester M o r r i l l , S e c r e t a r y . neces- l a t t e r We w i l l Currency n a t i o n a l Very TO is i n s t r u c t i o n s i n s t r u c t i o n s of it have Comptroller Treasury. as herewith but the u n t i l Monday. Comptroller of inclosed r e t u r n conservators t h i s the approved conditions in inclosed the copies and conservators sections and of Secretary not terms cooperate t h e be w i l l for i n s t r u c t i o n s Comptroller and complete accounts the banks and approved; with handle the of of the 130 X - 7 3 9 6 CERTAIN SECTIONS OF INSTRUCTIONS' OF THE CONSERVATORS OF NATIONAL 402 The f o r credit whatever conservator to bank's against requested to Bank's. Old such make scribed below, reserve account old remittances reserve account and old account. to which the have the represent segregated deposits to a account the in the serve the hands bank of or a to the old reserve the Federal draw no reserve to credited has should reserve bank. indebted balance the t o have bank's exceeds bank, been the the Federal the de- old determined Where the be account, d e f i n i t e l y which reserve TO d r a f t s bank may been not CURRENCY t r a n s f e r s s p e c i a l and is o r conservator's Federal conservator where indebtedness in should Federal conservator to special The THE Account. make no funds which but Reserve OF BANKS. should t r a n s f e r s of COMPTROLLER c r e d i t e d bank r e - amount Federal of reserve % bank may be requested c o n s e r v a t o r ' s t i o n of the general the general reserve bank of t r a n s f e r s account conservator, make may not but under t r a n s f e r s account, Comptroller These or to must special t h e to be be of described such below, excess with amount t h e to authoriza- Currency, the conservator's made made by d r a f t s with arrangements the or special checks consent agreed to of by account drawn t h e i t . t h e by F e d e r a l 131 •• 2 •" X-7596 403 If the which are to segregated be Act, in the the not located in account may be as to has any reserve in 206 s p e c i a l of account styled section to the in the s u b s t a n t i a l l y Account. authorized as pursuant bank been Special l i m i t a t i o n provided received Federal a conservator subject funds Conservator's such to the in of and t h i s which the F e d e r a l The items of Regulation in for such published member such t h i s of t h e banks, time bank checks time but the reserve and schedules deposited bank is which Special Account by a to c o l l e c t i o n cash which the number other and terms and cash of and such cash items. in accordance used in giving credit a l l bank's items days items conditions expected of cash handle be time bank par. the of end reserve not are of at Board w i l l Federal checks receive Reserve bank increase may " the collect subject other schedules may bank Federal with checks, can account regarding Federal deposit reserve in c i r c u l a r The credit J may Government reserve Federal deposited current its cash, be address) conservator account Conservation conservator (Conservator) The deposits withdrawal, such Conservator's (Bank new follows: " in nay which the or Bank a u t h o r i t y name accept payment of d i s t r i c t as to to give with credit to a v a i l a b i l i t y estimated to be s u f f i - 133 X-7396 - 3 cient to obtain mail advice conservator, however, are by received ment and and other u n t i l such that cash items payment in held such Federal items f o r c o l l e c t i o n special account, c u l a r , The instance sented should such A l l sent the c l e a r l y t o at f e d e r a l conservator's the not deposits account may credit t h e w i l l Federal any items u n t i l the Federal account reserve of reserve checks conservator c o l l e c t i o n the the of d e p o s i t - such non-cash in each deposits such c i r - r e p r e advice. c o n s e r v a t o r ' s and a l l non-cash c o l l e c t i o n and c r e d i t be marked bank that such for c o n s e r v a t o r ' s credit of Govern- and c o l l e c t i o n received should con- from the d r a f t s , handle to in of The accounts such bamk pay- such c o l l e c t i o n non-cash has by notes, withdrawals he f i n a l i n s t r u c t i o n s . and of items r e s u l t i n g for books i t s f o r to the segregated i t s such The provisions. maturing receive items. the these conservator bank by loss of advised any by subject items with permit reserve special on be a l l permit f o r special accordance non-cash special to in and that foregoing non-cash bank such represented v i o l a t i o n the reserve conservator and by to to may accept other c o l l e c t e d bunk of permitted the accountable and The be elapsud conservator ors. not in mind deposits with deposits obligations when has in reserve should time non-payment bear of accordance The credit Federal items may be of should withdrawals s u f f i c i e n t servator ment the of so as items to are items of the i n d i c a t e f o r the It: X-7396 - 4 c r e d i t of such s p e c i a l accounts, • A l l items sent t o the Federal reserve bank by the conserv a t o r f o r c r e d i t to t h i s account, whether cash items or non-cash items, should be indorsed, "Pay t o the Order of t h e Federal Reserve Bank of f o r c r e d i t t o Conservator's s p e c i a l account (Bank and address) By (Conservator) A l l prior indorsements guaranteed." The conservator may draw d r a f t s against t h i s s p e c i a l account at the Federal reserve bank (a) in payment of chocks or d r a f t s drawn by d e p o s i t o r s against such s p e c i a l segregated d e p o s i t s when presented to him by other banking i n s t i t u t i o n s ; (b) in order t o provide himself with cash with which t o pay such d e p o s i t s o r (c) t o provide de- p o s i t o r s in such segregated accounts with d r a f t s f o r exchange purposes. A l l d r a f t s against such account should be signed by the conservator and otherwise i d e n t i f i e d in such manner as to show c l e a r l y the account t o which they should be charged.. I f t h e bank which i s in conservatorship accepted new de- . p o s i t s withdrawable without r e s t r i c t i o n pursuant t o agreement or under S t a t e l e g i s l a t i o n , gubernatorial proclamation or P r e s i d e n t i a l proclamation and opened and maintained a s p e c i a l account w i t h the - 5 - X-7396 1 3 4 f e d e r a l reserve bank, representing such new d e p o s i t s , the Federal reserve hank should be requested to t r a n s f e r the balance now c a r r i e d in such s p e c i a l account to the Conservator 1 s Special Account a t the Federal reserve bank. 404. Conservator 1 s General Account. Funds' r e c e i v e d by the conservator in connection w i t h h i s conservatorship from any source other than from s p e c i a l segregated d e p o s i t s r e f e r r e d to above may be deposited in the Federal reserve bank of the d i s t r i c t i n which such bank i s l o c a t e d i n a general account in the name of the conservator which account may be s t y l e d s u b s t a n t i a l l y a s follows; " ___ Conservator's General Account (Bank and address) (Conservator) " i n y c o l l e c t i o n s made by the conservator upon the unpledged a s s e t s of the bank while i n conservatorship may be d e p o s i t e d i n t h i s general account. The conservator may d e p o s i t w i t h the Federal reserve bank i n t h i s account cash, Government checks, checks and other cash items which the Federal reserve bank can c o l l e c t a t p a r . The Federal reserve bank may r e c e i v e and handle a l l cash items d e p o s i t e d in t h i s account subject to the terms and c o n d i t i o n s of Regulation J of the Federal Be serve Board and of such bank's current c i r c u l a r regarding the c o l l e c t i o n of cash items. - 6 - X-7S96 The Federal reserve bank w i l l not be expected to g i v e c r e d i t f o r such checks and other cash items in accordance with i t s published time schedules which are used in g i v i n g c r e d i t to member banks, but may increase the time of c r e d i t a v a i l a b i l i t y i n such time schedules by a number of days estimated to be s u f f i c i e n t to obtain mail a d v i c e of non-payment of such items. The conservator, however, should bear in mind t h a t a l l such items are r e c e i v e d by the Federal reserve bank subject to f i n a l payment. The conservator may deposit i n such general account maturing n o t e s , d r a f t s , Government o b l i g a t i o n s and other non-cash items f o r c o l l e c t i o n and f o r c r e d i t when c o l l e c t e d . The Federal reserve bank may r e c e i v e and handle such non-cash items f o r c o l l e c t i o n and c r e d i t on i t s books to the c o n s e r v a t o r ' s general account, i n accordance with i t s non-cash c o l l e c t i o n c i r c u l a r , and the conservator w i l l be advised of such c r e d i t in each i n s t a n c e . A l l d e p o s i t s by the conservator i n the Conservator's Gene r a l Account a t the Federal reserve bank and a l l non-cash items sent to the Federal reserve bank f o r c o l l e c t i o n and c r e d i t of the Cons e r v a t o r ' s General Account should be marked so a s to i n d i c a t e c l e a r l y to the Federal reserve bank that such items are f o r the c r e d i t of such g e n e r a l account. A l l items sent t o the Federal reserve bank by the c o n s e r vator f o r c r e d i t to t h i s account, whether cash items or non-cash items, 186 - 7 - X-7396 should be indorsed, 'tPay to the Order of the Federal Reserve Bank of f o r c r e d i t to Conservator's General Account (Bank and address) By (conservator) A l l p r i o r indorsements guaranteed." The conservator may withdraw funds from t h i s general account only when and a s authorized by the Comptroller of the Currency. A l l d r a f t s a g a i n s t such account should be signed by the conservator and otherwise i d e n t i f i e d in such manner a s to show c l e a r l y the account to which they should be charged. 4 - 8 405. X-7396 :lt>7 Conservator's Depositary Account. In a d d i t i o n to a Special Account and General Account maintained with the Federal reserve bank, the conservator may open an account w i t h a n a t i o n a l or State member hank, l i c e n s e d to reopen toy the Secretary of the Treasury, which Account i s r e f e r r e d to h e r e i n a s the "Conservator's Dep o s i t a r y Account." This account may be u t i l i z e d f o r the f o l l o w i n g purposes: (a) As an account i n which to maintain funds f o r current operating purposes, including s a l a r i e s , s u p p l i e s , and other items of expense. i (to) For the c o l l e c t i o n , f o r the account and a t the i n s t a n c e of d e p o s i t o r s , of checks and other cash items drawn on nonpar banks which w i l l not toe accepted by the Federal reserve bank a s w e l l a s any noncash items which the Federal reserve bank w i l l not handle. Such c o l l e c t i o n s w i l l be undertaken by the depositary a t the instance of the conservator, but f o r the account and a s agent of the owners or h o l d e r s of such i t e m s . When and a s the conservator may r e c e i v e a c t u a l payment of such items, the proceeds may, w i t h the acquiescence or upon the d i r e c t i o n of the d e p o s i t o r s , be placed i n s p e c i a l segregated accounts to the c r e d i t of the d e p o s i t o r s and then t r a n s f e r r e d to the conservator's s p e c i a l account w i t h the Federal reserve bank. t (c) For d e p o s i t t h e r e i n of c o l l e c t i o n s e f f e c t e d by the conservator from a s s e t s of the bank and f o r the d e p o s i t of cash and of checks or other items belonging to the bank, (d) For c o l l e c t i o n , a t the instance and f o r the account of others, of checks or other items, whether cash or noncash, l e f t or placed with the conservator f o r that purpose. The conservator s h a l l make t r a n s f e r s from time to time from the depositary account to the c o n s e r v a t o r ' s general account w i t h the Federal r e serve bank d e s c r i b e d on page ______ of these i n s t r u c t i o n s , o f such e x c e s s of c o l l e c t e d funds a s w i l l not be needed i n t h i s account f o r current operating purposes. Withdrawals from t h i s account may be made by the conservator f o r any purpose authorized h e r e i n - 9 - X-7396 Chapter V ASSISTANTS TO CONSERVATORS* Die Conservator may appoint a competent person or persons to serve a s h i s a s s i s t a n t or a s s i s t a n t s . An a s s i s t a n t to a con- servator s h a l l have the r i g h t to sign i n the name and on b e h a l f of the conservator checks drawn on any account mentioned herein# to the e x t e n t and under the circumstances h e r e i n authorized, a s w e l l as to perform such other purely m i n i s t e r i a l d u t i e s and f u n c t i o n s of a routine nature and not i n v o l v i n g the e x e r c i s e of d i s c r e t i o n ; as the conservator may from time to time d e l e g a t e and a u t h o r i z e . The name Sf any such a s s i s t a n t s h a l l upon appointment be promptly c e r t i f i e d to the Comptroller of the Currency and to the Federal reserve bank and the c o n s e r v a t o r ' s depositary bank* When n o t i f y i n g the Federal reserve bank and d e p o s i t a r y bank of the appointment of any such a s s i s t a n t , the conservator s h a l l f u r n i s h them r e s p e c t i v e l y w i t h a specimen signature of such assistant.
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