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FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL. CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
SUBJECT:
,.
X-9411
January 3, 1956.
Revised Regulations Governing Telegraphic
Transfers and Federal Reserve Leased Wires.
·near Sir:
The Governors' Conference on October 25, 1935, approved a
report of its standing committee on collections recommending that
transfers of funds be made by the Federal Reserve banks for nonmember
clearing banks at their expense over commercial wires and that a list
of nonmember clearing banks be included in the semi-annual par list.
The Board of Governors of the Federal Reserve System concurs in this
recommendation and will arrange to have a list of nonmember clearing
banks included in the
semi-a~ual
par listi
Regulations governing
the use of Federal Reserve leased wires for the purpose of making
telegraphic transfers and otherwise as contained in the Board's letter
X-4099 of June 21, 1924, are amended as follows:
1. Telegraphic transfers of funds over the leased wires
will be accepted from and paid to member banks o1uy. They must represent bank balances and can be made only for round amounts, i. e.,
multiples of $100. The term "bank.balance" shall be construed to
mean an accumulE,~.tion of funds comprising an established uccount
carried by one bank with another bank.
2. The information given in telegrams transferring funds
over the leased wires must be limited to the name of the sending member bank, name of its correspondent member bank requesting the transfer, name of the member bank receiving credit, and name of its correspondent member bank.
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X-94.Ll
3. The Federal reserve code, including test word, must
be used for all messc.ges involvin~:{ the tram·fer of funds and, in
the interest of economy, aLL other telegrams should be sent in code
·nhen its use shortens the meeso.ge rna terially.
4. In addition to the usual mail advice to the bank
receiving credit for telegraphic tr&nsfers of funds, immediate advice
by telegrap).'l, dr otherwise, should be ~iven by the Federal reserve
bank receiving the transfer in cases •::here th<> sending bank or the
credited bank has stated that other than the usual mail advice is
neCElSSary, or where the nature of tlw transaction or the amount involved
indicates that the addi tiono.l expens<;; is justified, as to which the
receiving Federal heserve bank wilJ. t3Xt:.rcise its discretion. All such
wire advices. should be at the expense of the bank receivihg dredit and,
therefore, should be sent collect.
5. hequests for telegraphic tre.nsfers of funds for consummation on date of receipt should not be accepted by Federal reserve
banks later than thirty (~0) minutes prior tc· the closing hour of the
Federal reserve bank to which tram;f'er is to be made. Any telegraphic
transfers of funds requested after such timt! will be ma.ie at the discretion of the Federal reserve bank recsiving credit.
6. The leased wires shall net be used for tracing or adpayment or non-payment of' any nun-car:;h cc.;llectlon i terns, nvr
for transferring the proce~ds ~hereof.
V:J.Sl.n~
7. The leas6d wires shall not be used for reconciling exceptions in accounts bet ·8en Federal l'(,St~rve banks, except where a loss
might ue involved.
8. Any loss re:ml tine; from negligence on the part of the
Federal reserve system in the transmi::roivn of' telegrams transferring
funds over the J.ea sed wires thr·vugh rc:l<:q st& tions shall be borne by
the sending Federa.l r8serve l.lank, ··unlet:s responsibility can be definitely placE:d upon the F'ederul. reserve bank to which the telegram was
addressed.
9. Teleg:mm;:.; must be ·Norded &s concisely as pc)sslblo. 'I'elegrams should net be r:;ent .:h·.:;n cummunic::·~ic·n by mail ';:ill suffice. For
the purpose of enforcln;; thest.: rc.;ulat:L<;ns, provisj_cm should be mads in
each Federal reserve: bank so thEt-~ ~i.llY m.i.suse of the lr:.ased ·.vires ·.dl:J.
be brou:;ht to the attcntiun of a dc:'Sit";l1ated ufficer for reft::renca to
the originating department, ::;r, in the ca0c of incorr,ing mt:ssage!:!, to
the sending Federal reserv~ bank.
The follo•xln;; clG.uscs und<>r the respective he&dings shou,Ld
I
,l
be included by all FGdoral heservo banks in thGir circuh.rs to membt::r
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X-9411
and nonmember clearing banks relating to teJ.egraphic transfers of funds.
ThANSFEhS CJVEh. LEA::-I@.JilhES
1. Only transfers of bank balances in round amounts, that
is multiples of ~100, will be mude over the Feaeral reserve leased wires.
The term "bank balance" shall be construed to mean an accumulation of
funds comprising an eBtablish(~d account mCJ.intained by a member bank with
its Federal reservE: bank or wl th another n1cmber bank.
Telegraphic transfers of funds over the leased 'Hires ·::ill
be made for and paid to member banks only. Such transfers will he made
without cost to member banks.
2.
z,. The descriptive da.ta in telegrams transferring bank balanc.es
over the leased wires must be limited to the amount to be transferred,
name of the member bunk to receive credit, and ·nhen necessary, name of
its correspondent member bank, and name of membE:r bank ·itith which request
originated.
4. Transfers of the proceeds of indiv:l.d.uul cc.llecticn items
will not be made over the leased <vires.
5. Th8 Federal reserve banks maintc:in, at large expense, a
leased wire systein over which it :ls necessary to transmit a heavy volume
of important communications. Member banks are requested to cooperate with
us in attempting to avoid overdrowdil1g the leased ~vires by not ntaking
requests for tele~ra.phic transfers of small amounts, or those ;c;hich can
be made as ·nell through the maiis.
1. Telegraphic transfers of funds for any :purJ_Jose and in any
amount and ''li thL·Ut limitation as to descr lptive dr.~.t\'..1 ·;dll be made over
the c01nmercial telegraph wires for member banks. i.hile such transfers
will be acceptt3d from and paicl to member banks only} they may be for the
use of any btcnk 1 individual, firm or C-Jrpcro.tion.
2. TeJ.e~~raphlc tn,nsf.;;rs of br..ul{ balLO.nces in round ttmounts,
that is multiples cf ~100 1 1v.i.ll be made over the cor.unercial telegraph
'tdres for nonmember c1Garin,:; b:.nks. Such tr&nsfers Hill be accepted from
any member bank for the credit of any ncnm<:mbcr cl.:;aring bank, and from
any nonmember clearin;; bank fer the credit of any member bank or any
other nonmember clearing bD.nk.
3. Tho cc.st of o.ll telegrams bt;;t•Neen Fdderul reserve banks
transferring funds over the commerch.l telegraph wires will be chu.rged
to the member and nonmember clearing banks for which the transfers are
made. i;1emter and n·~n:nuJber clearing banks should prepay the cost of
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X·-9411
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telegrams requesting such transfers, and telegrHms to member and nonmember
clear"ing banks advising credit ~.rill be sent "Colloct'1•
..
LIABILITY OF THE FEDERAL hBSEFcVE BANK
The Federal Reserve Bank of
will use due
diligence and care in the transfer of funds by telegraph to the roceiving Federal resE:::rve bank for credit to the account of the payee bank,
but will not be responsible for errors vr delays caused by circumstances
beyond its control,
Very tru.l.y yours,
. 11. n .. ._; \...... . ~.:_,~.·.it·.'!Ii 0..·
. ~/fJvv~
Chester ivlorrill;
Secretary.
'1'0 ALL GOVE.hNORS.
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@FedFRASER