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FEDERAL RESERVE BOARD
WASHINGTON
X-3539
Oatobe r
SUBJECT:
16, 1922·
Alteration of Warehouse Receipts for Cotton
issued by Memphis Tenninal Corporation.
Dear Sir:
For your infonnation there is enclosea herewith a.
copy of a telegram addressed to the Federal Beserve Board by Mr ..
W. G. Turner; Vice President of the Memphis Terminal Corporation,
~is, Tennessee, stating that a gr?at numbar of warehouse receipts issued by thl?-t Company, which is licensed llXldar the United
States Warahouse Act, have been al terea. so as to lower or raise
the grade of cotton call~d for by such racaipts.
It is fearad that such al. tl3rations will seriously
hanper the financing by member banks of tha stor~ and band.ling
ot cotton, and it is hopad that ~a.ch Fcd~ral Raso:rve Bank will
cooperate to such extent as is practicable in all efforts made
to detect such alterations and to devise :r;ndans of preventing
similar alterations in the futu.rEh
Yours very truly.
Vioe-Gotrarnor.
{Enclosure)
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X-3539a
Memphis. Tenn.
Oct- 12 1922
Vice Governor, Federal Reserve Bank
Washington, D. c.
Following telegram JUSt sant to Mr. H. S. Yohe in charge administration
United States Warehouse Act, United. States Departnent of Agriculture
Washington, D. c.
"We have a United States 'bonded warehouse license to operate
under the United States Bonded Warehouse Act two of our warehouses.
We have one United States bonded classer properly licensed. We
have .two bonded United Statas weighers properly licensed.
In
checking up the negotiable United States bonded warehouse receipts
is;;;ued by this company as a United States boncied warehouse last
season we find the following:
A very great number of the warehouse receipts issued by
ourselves showing the grades Nhich grades were declared to be
the true graci.e of this cotton by our United States bonded classer
have be~n changed over our signature and been lowered and raised
by ~oiT.e one presumably the party to whom the original warehouse
receipts were is~uad and a carbon copy kept of same.
How many
hundreds or thousands of these receipts have been so changed and
raised. or loweraci at vvill we have not yet determined accurately but
know 'Nithin the next few days. These receipts are now in our
possession properly cancelled and the cotton has been delivered.
Ev8ry rec.::ipt is plainly stampdd in red ink not stapled according
to your directions·.a:n<i permission the length of staple has been
insert2d over our signat1.rre on these receipts by someone.
The alteration of the grades after the grades have been
carefully determined by a United States bonded warehouse classer
either by the owner of the receipts, his representative, or any
one else is, the v~iter believes, a forgery; in fact, just as rruch
a forgery if the gracie has been raised as it would be to raise a
United States bank note of any denomination.
We do not know how far the United States Department of
Agriculture feels themselves responsible for an act of this kind ..
't'TiJ do not. r':e. think· that the intent and purpose of the Warehouse
Act was for the protection of all banks in the United States who
nac:;otiat3d tbese Ur:,ited States bonded warehouse receipts and
particularly the Fed.eral Reserve Banks.
Lefore instituting,prosecution on our own initiative we
would b:J glad to be informed.as to whether the prosecution or
prosecutions for these acts should take place through your department or through the Department of Justice under your auspices or
'.vhether ·.-.re ..1re e::p0cted to take charge of this matter ourselves.
In a matter of th1s l:ind i t is the opinion of the undersigned that
if tne Unit~d States Bonded Warehouse Act is intended to safeguard
the int.::r-:;;;:,t of bcm~'~S and. such alteration or alterations by the
owners of the cotton deposited be allowed which,of course, changes
the repra~ent~tion of the values represented on the face of the ware~
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X-3539a
house receipt then this co~any are very much disappointed in theiJ.·
view of the intention of the Warehouse Act.
All of the receipts
in question are available for your inspection or tha inspection of
any one who may be interested.
Please advise as soon as possible
whether your departmant is intera~teQ enou&h to see thase receipts
or whether the Departrrent of Ju9tice if it is under their jurisdiction desires to inspect them.
Copy of this message has been sent to Senator K. D. McKellar,
representing Western Tennessee, Hubert Fisher, Congressman from this
district, and Vice Governor of tha Federal Reserve :Ba.nk at washington .
.W. G. TURNER
Vice President, Memphis Terminal Corporation.
@FedFRASER