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824 —485— MEMORANDUM FOR_ THE_ BOARD. SETTLEMENT OF CLEARING HOUSE BALANCES. . T/ith one exception Federal Reserve Banks have the privilege of presenting items for payment through the local clearing house. In each city daily clearings are made and the rules call for a daily settlement cf debit balances. In seme Federal Reserve cities however, as a matter of practice, daily settlements are not insisted upon but are a matter cf arrangement between the'debtor and creditor tanks* A Federal Reserve Dank should not be a party tc deferred settlements. If a member tank requires a temporary advance a cleans is provided through the rediscount privilege. It is respectfully recommended that the Federal Reserve Ranks be advised that* in the opinion cf the Federal Reserve 7 care, debit balances arising out of transactions with clearing heuse members should be settled daily, either in cash, by credit on the books of the Federal Reserve Dank or in exchange acceptable to the creditor bank. Balances due to the Reserve Dank should be settled daily, either in cash, by debit on the books of the Federal Re serve Dank or in acceptable exchange on other cities. Certifi cates of indebtedness issued by the manager of a clearing house or cashiers' checks which are given in exchange thereof, should be presented for payment and settled for on the day cf issue. Respectfully submitted, J. A. "RODERICK Jan. 4, 1916. l/s/lo
@FedFRASER