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S-124 Reg. H-14 BOARD OF GOVERNORS OF THE 362 FEDERAL RESERVE SYSTEM WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO THE SOARD October 29, 1938. Dear Sir: The question has recently been raised as to whether the principles set forth in the uniform agreement regarding revision of examination procedure (as published in the July 1958 Bulletin), particularly with respect to the appraisal of securities and the requirements for charge-offs, are applicable to banks applying for m<:~mbership as well as to banks which are already members of the System. The Board feels that in accordance with the spirit and purpose of the agreement depreciation in securities of' banks applying for membership should be treated in the same manner as in the ca~;e of banks that are within the System. Accordingly the instructions in letters X-7581 and X-7705 dated September 11, 1933, and December 9, 1933, respectively, regarding the treat·ment of securities depreciat:Lon in connection with banks applying for membership in the Sy::;t.em are cancelled. The provisions of letter S-115 dated September 3, 1958, ap;Jly to examinations made in connection with applications for membership as well as to examinations of State member banks and the technical question of whether a bank's capital is unimpaired will be determined by the deduction of the total of classification IV. While to be legally eligible for membership a bank must have an unimpaired capital, the acceptability of a bank for membership, of course, dof31S not rest solely upon the determination of its legal eligibility. · Very truly yours, Chester Morrill, Secrotary. TO PRESIDENTS OF ALL E'EDERAL RESERVE BANKS.
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