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F E DE R AL RES EHBE BOARD STATEMENT FOR THE PRESS. X-1759 Release Morning Papers, December 18,1919. The F e d e r a l Reserve Board, has authorized and d i r e c t e d the F e d e r a l Reserve Bank of Sans ELS City t o e s t a b l i s h a branch o f f i c e a t Oklahoma City i n o r d e r , p a r t i c u l a r l y , to expedite shipments o£ currency t o and from member batiks i n the S t a t e of Oklahoma and t o provide b e t t e r f a c i l i t i e s f o r i n t r a n s t a t e c l e a r i n g of checks. As s e t f o r t h i n the Board's p r e l i m i n a r y statement of November 3 the d i s c o u n t f a c i l i t i e s which have bean accorded by the F e d e r a l Reserve Bank of Kansas City are regarded as ample. The Branch w i l l be operated i n accordance with t h e p r o v i s i o n s of Section 3 of the F e d e r a l Reserve Act, under by-laws t o be framed b y the d i r e c t o r s of the Federal Reserve Bank of Kansas City and approved b y the F e d e r a l Reserve Board. There w i l l be f i v e d i r e c t o r s , three of whom w i l l be appointed b y t h e F e d e r a l Reserve Bank of Kansas C i t y and two by t h e Federal Reserve Board, The Board has recommended t o the F e d e r a l Reserve Bank of Kansas C i t y t h a t the by-laws a s s i g n as t e r r i t o r y f o r the Oklahoma C i t y Branch t h a t p o r t i o n of the S t a t e of Oklahoma which i s not included i n the Eleventh F e d e r a l Reserve D i s t r i c t . An o u t l i n e of t h e powers and f u n c t i o n s t o be exercised by the b r a n c h as recommended by the Board i s , as f o l l o w s : The Branch bank w i l l r e c e i v e d e p o s i t s from member banks b u t w i l l c a r r y no d e p o s i t a c c o u n t s . A l l amounts r e c e i v e d on d e p o s i t w i l l be t r a n s m i t t e d d a i l y , b y t e l e g r a p h or o t h e r w i s e , to the F e d e r a l Reserve Bank of Kansas C i t y f o r c r e d i t to the accounts of the d e p o s i t i n g banks, and each member bank i n the t e r r i t o r y assigned t o the Branch, wherever l o c a t e d , may, a t i t s o p t i o n , make r e m i t t a n c e s of c u r r e n c y and checks d i r e c t t o t h e F e d e r a l Reserve Bank of Kansas C i t y . The Branch w i l l c a r r y no Government d e p o s i t s , b u t w i l l redeem Treasury c e r t i f i c a t e s ? -3' * x-1759 ^ \ pay Government c h e c k s , and. w i l l c l o s e out b a l a n c e s d a l l y w i t h the head o f f i c e * The Branch w i l l c a r r y no e a r n i n g a s s e t s ; a p p l i c a t i o n s fear loans or d i s c o u n t s from member banks and o f f e r s f o r s a l e of m a i l t r a n s f e r s , b a n k e r s 1 acceptances and b i l l s of exchange e l i g i b l e f o r purchase b y F e d e r a l Reserve Banks w i l l be t r a n s m i t t e d t o the F e d e r a l Reserve Bank of Kansas C i t y f o r f i n a l a c t i o n * Immediate c r e d i t , however* may be g i v e n i n c a s e s where i t becomes n e c e s s a r y f o r member banks t o r e d i s c o u n t i n order t o meet c l e a r i n g house d e b i t b a l a n c e s * unexpected d e f i c i e n c i e s i n r e s e r v e s , and any o t h e r case where quick arrangements a r e n e c e s s a r y , a l l a c t u a l r e d i s c o u n t i n g o p e r a t i o n s , however, t o be made a t the head o f f i c e , i n t e r e s t b e i n g charged f r o m t h e d a t e t h e n o t e s were r e c e i v e d b y the Branch# In c a s e s where n o t e s are secured b y United S t a t e s o b l i g a t i o n s , the Branch may, b y a u t h o r i t y of the F e d e r a l Reserve Bark of Raises C i t y , h o l d t h e c o l l a t e r a l and forward t h e n o t e s t o t h e p a r e n t bank w i t h t r u s t r e c e i p t s showing t h e amount and n a t u r e of c o l l a t e r a l h e l d . the Branch bank t e r r i t o r y may d e a l d i r e c t l y w i t h the p a r e n t bank. Banks i n The p r i n c i p a l f u n c t i o n s t o be e x e r c i s e d b y the Branch w i l l be the c l e a r i n g and c o l l e c t i o n of checks and the territory. of shipments of c u r r e n c y to and from menfcer barucs i n i t s A p r i v a t e wire w i l l be i n s t a l l e d between Kansas C i t y and Oklahoma C i t y i n order t h a t t h e Branch may t e l e g r a p h d a i l y t o t h e p a r e n t bank t h e amounts of a l l items r e c e i v e d f o r immediate c r e d i t or immediate d e b i t t o members or o t h e r F e d e r a l Reserve Banks, a l s o amounts of c u r r e n c y d e p o s i t e d aid the d e t a i l s of o t h e r t r a n s actions. This plan i s the same as the one which governs t h e o p e r a t i o n s of the b r a n c h banks a t C i n c i n n a t i , P i t t s b u r g , B u f f a l o end o t h e r c i t i e s . The Board has made a thorough s t u d y of the b r i e f s and arguments submitted b y r e p r e s e n t a t i v e s of Afiahnma c i t y and T u l s a , and has t a k e n a p o l l of the member banks i n the S t a t e of Oklahoma o u t s i d e of t h e two c i t i e s a p p l y i n g f o r t h e b r a n c h , the r e s u l t of which shows a d e c i d e d p r e f e r e n c e f o r Oklahoma C i t y , b o t h as t o the number of banas and a s t o banking r e s o u r c e s i n v o l v e d . Digitized forbanks FRASER i n e a s t e r n I t was proved, however, beyond q u e s t i o n t h a t Oklahoma have l a r g e volume of items which cannot be c o l l e c t e d 997 *-1759 through Oklahoma City without involving considerable l o s s of time, and owing t o railroad schedules the same condition applies t o some banks i n the western part of the Starts. Under the plan adopted additional f a c i l i t i e s are given without a f f e c t i n g the "business of any member bank and without f o r c i n g c o l l e c t i o n s i n t o a r t i f i c i a l channels. The Board reserves the r i g h t to authorize the discontinuance of the Branch at any time i f i t s operation i s found u n s a t i s f a c t o r y * December 17,1919-
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