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X-708 For release Friday Morning Newspapers, February 8, 1918. STATEi,lElfL' . FO::.. THE FRESS .. In connection with tho Executive Order relating to the control of foreign exchange transactions which was signed by the President on January Z6, the Fed.~ cral. Reserve Board announced today that a large nuu.ber of ap pl:i.cat:.i.ons i or rogistration C-:>rtificatos f:roiL 11 dealors 11 (as defined in th.,:, Order) nho desi.1-e to continue thoir f oro:i.gn exchange dealings have boen. received.. The ~card calls attention to the fact that under the terms ofthe Or.aer nc person other th:m a 1•custoll6i·s"(as d.efinod in the Order) who shall not have obt~ined on or before February 15J 1918 1 a registration certificate sha~l) after that date, engage in any foreign exchange transactions" export or oarzr.arking of gold or silver coin or bullion or currcncy 1 transfers of credit in any foi"lL (other than cr0dit.s relating solely to transactions to be executed wholly w;i.thin the United States) and transfers of evidences of indebtedness or of the ownership of proforty b.:;tween the Uni t·3d States and any foreign country whether ene~y, ally of ene~y or oth0rwise 1 or between residents of one or ~ore foreign countries by any person within the United States. For guida.nce of "dealers" to whom registration certificates aro issued., th0 Federal Rese.rvo Joard has prepared a parr:.phlet "Instructions to Dealers as defined under Executive Order of the President of the United States., dated January· 26.- 19l8 11 J a copy of which will ba delivered to each "deaJ.er 11 to whor.r. a registration certificate is issued •. Additional copies of the par;.phlot can later be obtained froiL tho Federal ~eservo Banks or from the Division of foreign Exchange of tho Federal Reserve Board~ 16 wa11 Street 1 New York City. Briefly,·_thc "Instructions: to Dealers" calls att;mtion to the :followjng: • X-708 ' ·' .. - .2- Tha.t 11 d.ealers" when filing required reports are not released frott responsibility in reporting to tha Board prOffiptly and fully whenever they have reason to believe that a:ny transactions are _directly or indirectly for tho benefit of any ano~y or ally of ene~y. That declarations from all foreign correspondents of 11 dealors" to tho 0ffect that their transactions with such "dealers" will not be directly or indirectly for the benefit of an enemy or ally of enex:cy of the United States 1 are required_; such declarations to be filed with the Federal Reserve Board through a Federal Reserve Bank. ~orican~ That declarations will be required from residents in foreign countries in the sane ~annor as from foreign cor respondents. That special declarations of non-enemy interest are required in cortain instances 1 which are to be filed with the Federal Reserve Board. That it beconas necessary after February 15 for collecting agencies throughout tho United States to exaudne all instrurr.snts received points for enemy dr~Ners fr~ foreign or indorsers. That "customers" having business with 11 dealers" are required in their application for service to state the purpose of tha transaction and that it is not directly or indirectly for the benefit of an enemy Qr ally of ene~y of the United Sti!-tes. That no authority is extended to cates to en~go an or ally of ene~.y 11 dealers 11 holding registration certifi- in any transaction which invblvcs or nay involve trading with ene~.y; that should a.ccasion arise where. a 11 dealcr 11 might X3(/3 ' " - 3- desiro to undcrt~ke sudh ;;;; transaction, he ccm nc.;t do so until ho has ob- tained a liconse from tho W::tr Trc..i.e Bc·ar:L That all 11 d.oil.lerz" rr.:is'~ sccuri ties as of close of file ft,:d.c.-wn:.n of "!::2-Jances of b"J.sinos~ f-.a~Jt'i.lary acc;o~mts ancl 2C., and theroafter on Wed.n·3s<l3y ports n wiE be f O'J.nd details as to thG f or.vvara ~ng of woekly repori·s. instructions rolat 4.ng to the c<Jr..pilation of re1)orts is also F\..J. L cont.a~ned in the pamphlet. Pa-rticular foreign business attont~on c:;;~.llGc1. to tho paragraph throu~)1 dcrr~e~st:.c corrospond.e11ts· 11 ~ nobd that while such cates~ i:3 they are not 11 11 DcaJ.ers 11 who tmnr;ac+. f:.on . whJ.ch it v'lil\ bo doalors;' r,.:wt tai:o vut the proper registration certifi- re~uired to nal:e reports to tho Foderal Reserve Boal·dJ but rr.ust give full' inforrr:ation regarding each transaction to tho domestic ndealer 11 through whom they operato 1 in order that such 11 dealers 11 can include the transaction in their reports under the proper h0adings. Should su~h "dealers" consun:mate any transactions directly with foreign correspo;'ldents, they nust rr.ake aepara:te reports to thG Foderal Roserve Board through the Feder~l therr.~ Reserve Bank of their respective district~ and nust not include or with them any transactions conaunn.ated through their dorrostic ~tropolital agencies. Full infurn.ation relating to the foregoing, as well as other infonr.ation is contained in the p~phlet 1 . and its caruful reading by each holder of a registration C3rtificate will be necessary. X-'?08 - 4 - Until F3bruary 15 1 1918 1 all persons (as defined in the Executive Ord.e:r) who aro carrying on any business described under tbe word 11 dealer 11 rr.ay after rra.k.i.ng proper application for registratir:m certificate with the Foo.e:ra1. Reserve Bank in their distr:tct continue their f ore].gn business exactly as in the past. By•February 15 1 it is expected tha.t all those whose o,ppJ icattons for registration certificates a:r:e allowad will be in receipt of full instn•.c;tions as to how then to proceed. N.erchants, industrial corporations~ stock exchange brokers, and others, as wvll as foreign ex 1;ha.nge bankers who do a foreign bus}.ness, ahoulc aBc:ertain from their Federal Reserve Bank whether the nature of their business is such as to require them to apply for a registration certificate. 2/7/18
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