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FEDERAL RESERVE BOARD WASHINGTON X-7272 October 15, 1932. ADDRESS OFFICIAL CORRESPONDENCE TO THE FEDERAL RESERVE BOARD SUBJECT: Shipment of Canceled Checks, e t c . , "by E x p r e s s . Dear S i r : There i s i n c l o s e d a copy of a l e t t e r d a t e d September 13, 1 9 3 2 , w i t h i n c l o s u r e s , a d d r e s s e d t o t h e S e c r e t a r y o f t h e B o a r d "by t h e D e p u t y G o v e r n o r o f t h e F e d e r a l R e s e r v e Bank o f K a n s a s C i t y , t o g e t h e r w i t h a c o p y o f a memorandum p r e p a r e d "by t h e o f f i c e o f t h e B o a r d ' s C o u n s e l , r e l a t i n g t o a n i n q u i r y made b y a P o s t O f f i c e I n s p e c t o r c o n c e r n i n g v a r i o u s s h i p m e n t s made "by t h a t "bank w h i c h t h e I n s p e c t o r f e e l s should perhaps have been sent by mail rather than by e x p r e s s . As y o u w i l l n o t e f r o m t h e i n c l o s e d c o r r e s p o n d e n c e , t h e m a t t e r has n o t y e t b e e n a c t e d upon by t h e P o s t O f f i c e D e p a r t m e n t . This correspondence i s being forwarded to you, however, f o r your i n f o r m a t i o n and w i t h the r e q u e s t t h a t you a d v i s e the Board i n c a s e y o u h a v e a n y comments or i n f o r m a t i o n r e g a r d i n g s i m i l a r i n c i d e n t s . I t w o u l d s e e m t h a t no u s e f u l p u r p o s e w o u l d b e s e r v e d b y t a k i n g t h e m a t t e r up w i t h t h e o f f i c i a l s of t h e P o s t O f f i c e w i t h which you deal. Very t r u l y y o u r s , Chester Morrill, Secretary. Inclosures. TO http://fraser.stlouisfed.org/ GOVERNORS Federal Reserve Bank of St. Louis OF ALL F . R . B A M S . C O P / X-7279-a FEDERAL RESERVE B A H OF KANSAS CITY September 1 3 , 1932. Mr. C h e s t e r M o r r i l l , S e c r e t a r y , Federal Reserve Board, Washington, D.C. Dear Mr. M o r r i l l : There i s a t t a c h e d h e r e t o , f o r your i n f o r m a t i o n , copy of a l e t t e r r e c e n t l y r e c e i v e d from the Post O f f i c e I n s p e c t o r a t t h i s p o i n t , t o g e t h e r w i t h c a r b o n c o p y o f Mr. H e l m ' s r e p l y u n d e r d a t e o f S e p t . 9 . I t w i l l he o b s e r v e d t h a t t h e P o s t O f f i c e Department i s o b j e c t i n g t o the sending of t h e d a i l y t r a n s c r i p t of the T r e a s u r e r ' s d a i l y account and t h e w a r r a n t s l i s t e d t h e r e i n , a s w e l l a s c e r t a i n c a s h l e t t e r s , b y e x p r e s s . I n a c o n v e r s a t i o n w i t h t h e P o s t O f f i c e I n s p e c t o r , i t was i n d i c a t e d t h a t t h e P o s t O f f i c e Department might a t t e m p t t o r e c o v e r p o s t a g e on a l l s h i p m e n t s o f t h i s c h a r a c t e r w h i c h we h a v e h e r e t o f o r e made b y e x p r e s s , a n d s i n c e t h i s i s a m a t t e r w h i c h u n d o u b t e d l y i n v o l v e s o t h e r F e d e r a l r e s e r v e b a n k s , i t i s p o s s i b l e y o u may f e e l i t d e s i r a b l e t o c o n s u l t w i t h some o f t h e o f f i c i a l s o f t h e P o s t O f f i c e D e p a r t m e n t . In this connection, attention i s directed to the f a c t that, i n a l l c a s e s b e f o r e making e x p r e s s a r r a n g e m e n t s f o r s h i p m e n t s o t h e r than t h e T r e a s u r e r ' s t r a n s c r i p t s , t h e c h a r a c t e r of t h e documents t o be e n c l o s e d , t o g e t h e r w i t h the form of p r i n t e d l e t t e r of t r a n s m i t t a l , has b e e n s u b m i t t e d t o t h e l o c a l P o s t O f f i c e f o r a p p r o v a l . Such a p p r o v a l , h o w e v e r , h a s n o t b e e n i n w r i t i n g and t h e o n l y w r i t t e n a u t h o r i z a t i o n we h a v e i s t h a t r e l a t i n g t o t h e T r e a s u r e r ' s t r a n s c r i p t c o n t a i n e d i n B o a r d ' s l e t t e r X - 1 2 9 6 and s u b s e q u e n t comnrunicat i o n s f r o m t h e T r e a s u r e r ' s o f f i c e . I t i s our u n d e r s t a n d i n g t h a t t h e o b j e c t i o n o f t h e P o s t O f f i c e D e p a r t m e n t i s b a s e d on t h e p r i n t e d l e t t e r o f t r a n s m i t t a l which contains i n s t r u c t i o n s . Very t r u l y y o u r s , (S) CAW:L C. A . W o r t h i n g t o n , Deputy Governor. ,383 COPY X»7875R> POST OFFICE DEPARTLiENT B . W. F i c k e n "Inspector O f f i c e of I n s p e c t o r C a s e No. 3 2 4 2 6 - C Kansas C i t y , M i s s o u r i , September 1 , 1 9 3 2 . SUBJECT: T r a n s m i s s i o n b y e x p r e s s of d a i l y c l e a r a n c e l e t t e r , e t c . F e d e r a l R e s e r v e Bank, Kansas C i t y , M i s s o u r i . A t t e n t i o n Mr. J . W. Helm. Gentlemen: The P o s t O f f i c e D e p a r t m e n t h a s r e q u e s t e d a n i n v e s t i g a t i o n of t h e r e p o r t e d p r a c t i c e o f "bank s e n d i n g t h e i r d a i l y c l e a r a n c e l e t t e r , a c c o m p a n i e d b y p a i d or c a n c e l e d c h e c k , "by e x p r e s s i n s t e a d o f "by m a i l , and i n t h i s c o n n e c t i o n t h e S e c o n d A s s i s t a n t P o s t m a s t e r G e n e r a l a d v i s e s a s f o l l o w s : "While t h e t r a n s m i s s i o n of c a n c e l e d c h e c k s , i f n o t a c c o m p a n i e d "by a n y t h i n g i n t h e n a t u r e o f p e r s o n a l c o r r e s p o n d e n c e , w o u l d n o t "be v i o l a t i v e o f t h e l a w , t h e f a c t t h a t a d a i l y c l e a r a n c e l e t t e r i s e n c l o s e d would c o n s t i t u t e an apparent v i o l a t i o n of the p r i v a t e express statutes." I n o r d e r t o d e t e r m i n e j u s t what i s "being s e n t "by e x p r e s s "by y o u r "bank, w i l l y o u k i n d l y a d v i s e t o whom y o u a r e m a k i n g e x p r e s s s h i p m e n t s , how o f t e n and f o r how l o n g a p e r i o d . A l s o p l e a s e a d v i s e j u s t what i s "being i n c l o s e d i n s u c h s h i p m e n t s , s u b m i t t i n g s a m p l e s of a l l l e t t e r s and f o r m s u s e d w i t h d e s c r i p t i v e e x p l a n a t i o n o f e a c h . I t i s a l s o d e s i r e d t h a t y o u a d v i s e f r o m what o t h e r "banks y o u a r e r e c e i v i n g c l e a r a n c e l e t t e r s and s i m i l a r m a t t e r "by e x p r e s s . Sincerely yours, /s/ B . W. FICKEN Post Office Inspector I uO'i X-7272-C 0 11 FEDERAL RESERVE BA11K or KANSAS CITY September 9, 1932. Mr. B. W. F i c l t e n , Post Office Inspector, Kansas C i t y , M i s s o u r i . Dear S i r : R e p l y i n g f u r t h e r t o t h e i n q u i r y c o n t a i n e d i n y o u r l e t t e r o f September 1 , 1 9 3 2 , Case Ho. 3 2 4 2 6 - C , y o u a r e a d v i s e d t h a t f o r y e a r s our d a i l y t r a n s c r i p t o f t h e g e n e r a l a c c o u n t of t h e T r e a s u r e r o f t h e U n i t e d S t a t e s h a s 'been f o r w a r d e d b y e x p r e s s , a c c o m p a n i e d "by a l l s u p p o r t i n g p a p e r s . T h i s was d o n e i n a c c o r d a n c e w i t h i n s t r u c t i o n s c o n t a i n e d i n General L e t t e r X-1296 from t h e F e d e r a l Reserve Board, W a s h i n g t o n , D. C . , d a t e d November 3 0 , 1 9 1 8 , a copy of w h i c h y o u w i l l f i n d e n c l o s e d . As r e q u e s t e d , y o u w i l l f i n d s a m p l e s o f t h e f o r m s w h i c h accompany our p a i d v o u c h e r s drawn on t h e T r e a s u r e r o f t h e U n i t e d S t a t e s and w h i c h a r e e n c l o s e d d a i l y w i t h t h e transcript of the Treasurer's general account. You a r e a l s o a d v i s e d t h a t "beginning i n 1 9 2 4 a n d 1 9 2 5 a n d c o n t i n u i n g u n t i l t h e p r e s e n t t i m e , we h a v e u s e d t h i s method f o r d e l i v e r y o f c h e c k s t o t h e F e d e r a l R e s e r v e Bank o f S t . L o u i s , t h e F e d e r a l R e s e r v e Bank of C h i c a g o , t h e F e d e r a l R e s e r v e Bank o f D a l l a s , and t o our "branches a t Omaha and Oklahoma C i t y . T h e s e s h i p m e n t s h a v e "been made d a i l y e x c e p t S u n d a y s , h o l i d a y s a n d e l e c t i o n d a y s , except t h a t , during the d a y l i g h t savings p e r i o d , shipments to the Federal Reserve Bank of C h i c a g o h a v e u s u a l l y "been s e n t "by m a i l . We a l s o r e c e i v e s i m i l a r i t e m s "by e x p r e s s f r o m our Omaha and Oklahoma C i t y "branches. You w i l l a l s o f i n d e n c l o s e d c o p i e s o f t h e f o r m s w h i c h a r e e n c l o s e d w i t h t h e c h e c k s w h i c h a r e f o r w a r d e d t o t h e F e d e r a l R e s e r v e Banks of C h i c a g o , D a l l a s and S t . L o u i s , a n d t o our "branches a t Omaha and Oklahoma C i t y . W i t h t h e e x c e p t i o n of t h e f o r m s a c c o m p a n y i n g t h e d a i l y t r a n s c r i p t o f t h e T r e a s u r e r ' s g e n e r a l a c c o u n t , a l l o t h e r f o r m s e n c l o s e d i n s u c h s h i p m e n t s h a v e "been p r e s e n t e d i n d u p l i c a t e t o t h e l o c a l p o s t o f f i c e o f f i c i a l s i n e v e r y c a s e f o r a p p r o v a l "before they were a l l o w e d t o b e s e n t by e x p r e s s . A l s o a s r e q u e s t e d , y o u a r e a d v i s e d t h a t we a r e r e c e i v i n g e x p r e s s s h i p m e n t s c o n t a i n i n g c h e c k s and s i m i l a r a d v i c e s from t h e f o l l o w i n g b a n k s : C o n t i n e n t a l I l l i n o i s Bank & T r u s t F e d e r a l R e s e r v e Bank o f C h i c a g o , F i r s t N a t i o n a l Bank, F i r s t N a t i o n a l Bank, C i t i z e n s N a t i o n a l Bank, Central N a t i o n a l Bank, M e r c h a n t s N a t i o n a l Bank, N a t i o n a l Bank of T o p e k a , F i r s t N a t i o n a l Bank, Fourth N a t i o n a l Bank, Chicago, 111. ii II ii n Joliet, " Emporia, Kans. ( i r r e g u l a r l y ) Topeka, Kans. N II ii Wichita, ii " II II *8 35 X~7273»c FEDERAL RESERVE B A H OF KANSAS CITY B . W. F i c k e n , P o s t O f f i c e I n s p e c t o r K. C. Mo. 9-9—32 —3— F i r s t N a t i o n a l Bank, S t . J o s e p h , Mo. ( i r r e g u l a r l y ) T o o t l e - L a c y N a t i o n a l Bank, tt it n it F e d e r a l R e s e r v e Bank o f S t . L o u i s , S t . L o u i s , " E x c h a n g e N a t i o n a l Ban!:, Tulsa, Okla. (irregularly) S h o u l d a n y f u r t h e r i n f o r m a t i o n b e d e s i r e d on t h i s m a t t e r , p l e a s e b e a s s u r e d t h a t we w i l l b e g l a d t o h a v e y o u a d v i s e u s . Very t r u l y y o u r s , J . W. Helm D e p u t y Governor and C a s h i e r COPY X-7273-d 386 S ^ f f i A L RESERVE BOARD OFFICE CORRESPONDENCE To The F e d e r a l R e s e r v e B o a r d From Mr. G-. Rowland Chase Date Sept. 30, 1933 S u b j e c t : Q u e s t i o n r a i s e d by P o s t O f f i c e Department a s t o whether c e r t a i n s h i p m e n t s made "by t h e F e d e r a l R e s e r v e Bank o f K a n s a s C i t y s h o u l d h e made by mail r a t h e r than by e x p r e s s . The a t t a c h e d c o r r e s p o n d e n c e d e a l s w i t h a n i n q u i r y made b y a P o s t O f f i c e I n s p e c t o r r e g a r d i n g s h i p m e n t s o f c a n c e l l e d c h e c k s and o t h e r m a t t e r s w h i c h t h e F e d e r a l R e s e r v e Bank of K a n s a s C i t y lias b e e n s e n d i n g by e x p r e s s , and which t h e I n s p e c t o r f e e l s should perhaps have been sent by m a i l . A s t o a p a r t of t h e s e s h i p m e n t s , t h e d a i l y t r a n s c r i p t o f g e n e r a l a c c o u n t and s u p p o r t i n g p a p e r s f o r w a r d e d t o t h e T r e a s u r e r o f t h e U n i t e d S t a t e s , t h e F e d e r a l R e s e r v e Bank i s f o l l o w i n g t h e p r a c t i c e s u g g e s t e d i n a c i r c u l a r l e t t e r from t h e F e d e r a l Reserve Board ( X - 1 2 9 6 ) , w h i c h was d a t e d November 3 0 , 1 9 1 8 , and i n t h i s r e s p e c t , a t l e a s t , i t i s p r o b a b l y a d o p t i n g t h e same p r a c t i c e a s a l l t h e o t h e r r e s e r v e b a n k s . A s i s s t a t e d i n t h e a t t a c h e d c o p y of t h e b a n k ' s l e t t e r d a t e d S e p t e m b e r 9 , 1 9 3 2 , t h e b a n k h a s a l s o b e e n s e n d i n g o t h e r m a t t e r s , i n c l u d i n g some " c a s h l e t t e r s " and t h e a c c o m p a n y i n g c h e c k s , b y e x p r e s s s i n c e 1 9 2 4 or 1925 The B o a r d ' s f i l e s do n o t i n d i c a t e t h a t a n y q u e s t i o n h a s h e r e t o f o r e been r a i s e d i n c o n n e c t i o n w i t h any shipments of t h i s k i n d . The I n s p e c t o r , i n h i s l e t t e r o f S e p t e m b e r 1 , q u o t e s t h e S e c o n d A s s i s t a n t Postmaster General to t h e e f f e c t t h a t the o b j e c t i o n i s not to t h e s e n d i n g of c a n c e l l e d checks by e x p r e s s but t o t h e s e n d i n g of s u c h m a t t e r accompanied by something i n t h e n a t u r e of a " l e t t e r " . The s t a t u t e t o w h i c h t h e I n s p e c t o r a p p a r e n t l y r e f e r s w i l l b e f o u n d i n T i t l e 1 8 , S e c t i o n 3 0 4 , U n i t e d S t a t e s C o d e , w h i c h makes i t a crime f o r a n y one t o e s t a b l i s h a " p r i v a t e e x p r e s s f o r t h e conr- 3 8 ? - 2 v e y a n c e of l e t t e r s or p a c k e t s " . - S e c t i o n 3 0 6 makes i t a c r i m e f o r t h e s e n d e r t o t r a n s m i t a n y l e t t e r o r p a c k e t "by s u c h m e a n s . The p u r p o s e of t h e s e s t a t u t e s ( w h i c h h a v e "been i n e x i s t e n c e i n d i f f e r e n t f o r m s a t l e a s t s i n c e t h e f i r s t p a r t of t h e l a s t c e n t u r y ) i s t o g i v e t o t h e P o s t O f f i c e Department a monopoly i n t h e t r a n s p o r t a t i o n of letters. A p p a r e n t l y t h e word " l e t t e r " h a s no t e c h n i c a l s i g n i f i c a n c e , "but i s u s e d i n t h e commonly a c c e p t e d m e a n i n g . The word " p a c k e t " means a p a c k e t o f l e t t e r s ; i n o t h e r w o r d s , t h e m o n o p o l y g r a n t e d d o e s n o t e x t e n d t o a n y t h i n g e x c e p t l e t t e r s ( S e e P o s t a l Laws a n d Regulations, 1934, Section 1256.) I t i s t h e o p i n i o n of t h i s o f f i c e t h a t no u s e f u l p u r p o s e w o u l d "be s e r v e d b y a t t e m p t i n g a t t h i s t i m e t o i n t e r v i e w o f f i c i a l s i n t h e P o s t O f f i c e Department i n Washington i n c o n n e c t i o n w i t h t h i s matter. To d a t e t h e r e h a s b e e n m e r e l y a n i n q u i r y b y a n i n s p e c t o r , and i t w o u l d seem i n a p p r o p r i a t e t o d i g n i f y t h e m a t t e r rath a n a t t e m p t to argue the c a s e u n t i l something f u r t h e r has been heard from t h e Post O f f i c e Department. I t i s , of course, p o s s i b l e t h a t t h i s i n c i d e n t i s a p a r t of t h e g e n e r a l attempt by t h e P o s t O f f i c e Department t o correct i t s annual d e f i c i t . I t would seem, however, t h a t should t h e P o s t O f f i c e Department attempt t o impose t h i s added c o s t upon t h e f e d e r a l R e s e r v e System i n c o n n e c t i o n w i t h t h e s e shipments, t h e burden could be a v o i d e d by s h i p p i n g t h e c a n c e l l e d checks and t h e c o v e r i n g l e t t e r s e p a r a t e l y , t h e f o r m e r by e x p r e s s and t h e l a t t e r b y m a i l . What w i l l b e t h e a t t i t u d e o f t h e D e p a r t m e n t r e g a r d i n g s h i p m e n t s made 3 8 8 3&-72?2~& - 3 - i n t h e p a s t , m u s t r e m a i n t o "be s e e n . A c c o r d i n g l y , i t i s suggested, t h a t t h e a t t a c h e d l e t t e r , t o g e t h e r w i t h c o p i e s o f t h e l e t t e r and i n c l o s u r e s f r o m t h e D e p u t y G o v e r n o r of t h e F e d e r a l R e s e r v e Bank o f K a n s a s C i t y , a n d a c o p y of t h i s memorandum, "be s e n t t o t h e G o v e r n o r s o f a l l F e d e r a l r e s e r v e b a n k s i n c a s e t h e y may h a v e a n y c o m m e n t s , or i n formation regarding similar incidents. Respectfully, G-. Howland C h a s e , Assistant Counsel, Letters attached
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