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WASHINGTON
~
October 25, 1957.
AbORISS DP'P'ICIAL CDRIU:•I"ONDII:NCC;.
TD THC •cARD
· StJBJIC'l't ; Rulings by the Board of
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·
Governors on abstract or
~thetical questions.
·Dear Sir:
From time to time in the past the Board of Governors. has declined
to issue rulings or pass upon questions subni tted upon the ba.silJ or abstract inquiries or eypothetical cases, but it l'uis not followed a uniform
· practi.ce_ in this regard.
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Tbe 1.ssuance of wlings upon the basis of abstract or qpothetical
questions is in the Bo8.1'd' s opinion an undesirable pre.etic.;) which is ·
:fraught with .the possibilit'g of misunderstanding or confusion. When an
abstract questio~ is c<)nsidered 1 t ~~ nat possible to , visualize all of
tho different concr$ti.3 situations whJ:oh Ul$3 arise fd thin the scope. of
a.7J'¥ answer wbich ntq be given. Co1111equently, .i.t is difficult to limit
the an~:twer in such a way that it may not appear to apply to situations ·
which were not in mind in the prepn.rn tion of the answer and with respect
to which the answer given might b<-J inapplicable. Moreover, in order
tht1t .a.ey question mar have thorough 90llSideratloJ1 it. is, of course, nee...
essnry that all of th.e mat-erial facts which affect it should be known.
With these considet:ations in mind, the Board lws decided that it
will not issue rulings on abstract or l\YPOtbetical questions b.tt only
when a full nnd defiaite statement ot the facts of an actual case is betore the Board. An exception to this policy 1!11Jf be made in individual
cases, however, when the question presented is one which is alaost cer.:.
tain to arise in an actual transaction and a tull explanation of the ·
matter is presented to th& Boardt including the reasons wey it is contemplated that such u question will arise.
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When a Federal Reserve bank fin4s it desirable to submit to the
Bonrd a question which ~ arisen in ita operations or has been submit ...
tad to tt either by a i1110Il1ber OOnk or some other personj counsel for. the
Reserve bank should either p,r~ro or review tha statement of the question and the facts to ~be subn:tted to tho Board with a viaw to a full
and adequate presenta~i.On of tlle case, and ·he should· include a.n expression of his views w1 tH. r~gard to the question presented.
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473
8-59
It is expected, however, that Federal Reserve banks will continue
the practice now followed o£ disposing of queations presented to them in
so far as possible on the basis of previous :rulings of the Board, and that
they will submit questions to the Board for consideration only when they
have specific requests to do so or when after tull consideration they feel
that the questions are of such a nature or of such importance that it is
advisable that the Board be asked to pass upon them.
It is believed that the policy above described will be more satisfactory than the practice which has prevniled heretofore and ~~11 entail
less possibility of misunderstanding or confusion as to the scope or meaning -of rulings made by the Board. The cooper~tion of the Federal Reserve
banks in carrying out this policy will ~·appreciated by tho Board.
Very truly yours,
i
Morrill,
SeeretD.r7.
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C~ster
TO PRESIDENTS OF ALL FEDERAL RESERVE BAN!{S
@FedFRASER