The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F E D E R A L R E S E R V E BANK
O F NEW YORK
("C ircular N o. 3 0 9 9 ' !
U
J u n e
17,
1946
J
RESERVES OF MEMBER BANKS
To all Member Banks in the
Second Federal Reserve District:
This circular contains general information regarding the reserve requirements of member
banks with particular reference to the method of computing required reserves, and the making
of reports to us in this connection. Member banks in the territory assigned to the Buffalo
Branch should file reports directly with the Branch as in the past.
Statutory requirements
1. Section 19 of the Federal Reserve Act (hereinafter referred to as the “ Act” ) requires
every member bank to maintain reserve balances with its Federal Reserve bank equal to
stated percentages of its demand and time deposits; and authorizes the Board of Governors
of the Federal Reserve System, by regulation, to define certain terms used in the Act, to change
the requirements as to reserves within certain stated limits, and to prescribe penalties for
deficient reserves.
Regulation D
2. Pursuant to section 19 of the Act, the Board of Governors has issued its Regulation D,
to which reference is made for complete details respecting reserve requirements, and for the
penalties prescribed for deficiencies in reserves. A Supplement to Regulation D sets forth
the reserve requirements applicable at any given time. In the event of any change in reserve
requirements, we will promptly notify our member banks of the change.
War-time exemption from reserve requirements
3. Pursuant to the last sentence of section 19 of the Act, until six months after the cessa
tion of hostilities in the present war as determined by proclamation of the President of the
United States or concurrent resolution of the Congress, a member bank will not be required to
maintain reserves in respect of any balance held by it in a war loan deposit account, or in a
“ Series E, Bond Account” maintained by the member bank as a qualified issuing agent of
United States Savings Bonds of Series E under regulations of the Treasury Department. As
yet, there has been no determination by such proclamation or concurrent resolution of the
date of cessation of hostilities for the purposes of this provision.
Establishment and maintenance of reserve balances
4. Reserve balances may be established and maintained by credits for deposits of cur
rency and coin, of checks and other cash items, and of noncash items, and for advances and
discounts, transfers of funds, dividends paid on our capital stock, and other payments made
to and received and accepted by us for the account of a member bank. In this connection our
circulars in relation to the different types of transactions should be consulted. Subject to the
imposition of penalties for deficiencies in reserves, member banks are authorized by section 19
of the Act to check against and withdraw reserve balances for the purpose of meeting existing
liabilities.
Reports by member banks of deposits and required reserves
5. In order that we may know whether the reserves required of member banks are being
maintained, each member bank in the Second Federal Reserve District is required to file with
us, on forms furnished by us, periodical reports of its net demand and time deposits and reserve
required during the period covered by each report.
Weekly reports by central reserve and reserve city banks
6. Each member bank located in the Borough of Manhattan, the Borough of Brooklyn, or
the Borough of the Bronx, in the City of New York, or in the City of Buffalo, is required to make
a report for each weekly period ending on a Thursday. The report should be prepared on our
Form R.B. 20 in accordance with the instructions on the Form and should be dispatched
so as to reach us not later than the Monday following the end of the period covered by the report.
Semimonthly reports by country banks
7. Each member bank not required to file weekly reports as provided in paragraph 6 is
required to make a report for each of the half-month periods ending on the 15th day and the
last day of each month. The report should be prepared on our Form R.B. 13 in accordance
with the instructions on the Form and should be dispatched so as to reach us not later than the
5th day following the end of the period covered by the report.
Treatment of paid United States Savings Bonds
8. In preparing Form R.B. 20 or Form R.B. 13, a member bank which is qualified to make
payments in connection with the redemption of United States Savings Bonds should treat paid
bonds as follows:
(a) If the bank follows a practice of forwarding paid bonds to us on the day it makes
payment or on the following business day, it should treat such bonds as cash items in the
process of collection during the period prior to receipt of settlement from us, and should
include the amount of such bonds in Item 2(a) on Form R.B. 20 or R.B. 13;
(b) If the bank follows a practice of holding paid bonds for a longer period before
forwarding them to us, it should treat such bonds as cash items not in the process of
collection until the day they are forwarded to us, and should then treat them as cash items
in process of collection until receipt of settlement from us. Cash items not in process of
collection should not be reported on Form R.B. 20 or R.B. 13.
Daily computation of reserves
9. Form F.R. 414, which is reproduced on the following page, is furnished to member
banks to assist them in preparing the information as to deposits and reserves required to be
reported to us on Form R.B. 20 or R.B. 13. We believe that member banks will find it helpful
to maintain on Form F.R. 414 a daily record of this required information and to transfer the
information to Form R.B. 20 or R.B. 13, as the case may be. Form F.R. 414 need not be filed
with us.
Effect of this circular on previous circulars
10. This circular supersedes our Circular No. 2610 dated April 15, 1943, entitled “ Com
putation of Reserve to be Carried with the Federal Reserve Bank by Member Banks” ; and
so much of our Circular No. 2849 dated October 9, 1944, entitled “ Method of Reporting Paid
United States Savings Bonds on Reports of Deposits for Reserve Purposes and in Call Reports
of Condition, etc.” , as refers to the method of reporting paid United States Savings Bonds
on Forms R.B. 20 and R.B. 13.
Additional copies of this circular and copies of Forms R.B. 13, R.B. 20 and F.R. 414 will
be furnished upon request.
A llan S proul,
President.
Form Approved
Budget Bureau No. 55-R159-42
B oard o f G overn ors o f the
F e d F orm F.e R e 4i4Steni
(R e v . D ecem ber 1943)
COMPUTATION OF RESERVE TO BE CARRIED WITH THE
FEDERAL RESERVE BANK BY MEMBER BANKS
(F or definitions of the terms gross demand deposits, deductions allowed in computing
reserves, cash items in process of collection, net demand deposits and time deposits,
see Regulation D of the Board of Governors of the Federal Reserve System.)
1. GROSS D EM AN D D E P O SIT S:
(a) Demand deposits of banks1........................................................................... $.........................
(Corresponds to items 4 and 5 in Schedule E of the quarterly condition report)
(b) Other demand deposits...........................................................................................................................................
(Corresponds to items 1, 2, 3 and 6 in Schedule E of the quarterly condition report)
2. D ED U C TIO N S A L L O W E D IN COM PU TIN G R E S E R V E S :
(a) Cash items in process of collection, except to the extent included in
item 2-b (including checks with Federal Reserve Banks in process of
collection and checks on hand which will be presented for payment or
forwarded for collection on the following business d a y ).................................................
(Corresponds to item 1 in Schedule D of the quarterly condition report)
(b) Balances subject to 'immediate withdrawal due from other banks
(including cash items forwarded to a correspondent bank for collec
tion and credit and charged to “ Due from banks” , but excluding
balances due from Federal Reserve Banks, from foreign banks or
branches thereof, from foreign branches of domestic banks, or from
private banks)1 .......................................................................................................................
(Corresponds to item 2 in Schedule D of the quarterly condition report)
(c) W ar loan deposits of United States Government2..........................................................................................
3. N E T D E M A N D D E PO SITS ('item 1 minus item 2 ) ......................................................................................................
4. T IM E D E PO SITS ...............................................................................................................................................................
(See Schedule F o f the quarterly condition report for items constituting time deposits)
5. R E SE R V E R E Q U IR E D 3:
(a) On net demand deposits (item 3 above) :
Banks in central reserve cities,........ per cen t;
Banks in reserve cities,........ per cent;
Banks located elsewhere, ........ per c e n t ........................................................................................................
(b) On time deposits (item 4 above) : ........ per cent................................................................................................
(c)
Total reserve to be maintained with Federal Reserve Bank.......................................................................
1 Reciprocal interbank demand deposits with banks in the United States, except private banks and American branches of foreign
banks, must be reported net.
2 Deposits payable to the United States representing proceeds of sales of United States Savings Bonds o f Series E in banks
qualified as issuing agents under Treasury Department Circular No. 657, dated April 15, 1941, should be included in this item.
3 For current required reserve percentages, see latest supplement to Regulation D.
(The schedules referred to above are set forth on the reverse side)
r
SCHEDULE D—CASH, BALANCES WITH OTHER BANKS
(including reserve balance and cash items in process of collection)
D ollars
Cts .
1. Cash items in process of collection, including exchanges for clearing house..........................................................
2. Demand balances, excluding reciprocal balances, with banks in the U. S. (except private banks and American
branches of foreign banks)..............................................................................................................................................
3.
T o t a l of items 1 and 2 ..................................................................................................................................................
4. Other balances with banks in the United States (including private banks and American branches of foreign banks)
5. Balances with banks in foreign countries (including balances with foreign branches of other American banks) ..
1
6. Currency and coin...............................................................................................................................................................
<
7. Reserve with Federal Reserve bank.................................. ................................................................................................
8.
T o t a l of items 3 to 7 (must agree with item 6 of “ Assets” )
.............................................................................
SCHEDULE E—DEMAND DEPOSITS
1. Deposits of individuals, partnerships, and corporations (must agree with item 13 of “Liabilities” ) .........................
2.
2 (a
(a) Deposits of United States Government—War Loan and Series E bond accounts (not subject to reserve)
(b
r
( b) Deposits of United States Government— Other demand deposits of U. S. Govt, (subject to reserve)...
3. Deposits of States and political subdivisions............................................................................................................
4. Deposits, excluding reciprocal balances, of banks in the U. S. (including private banks and American branches
of foreign banks)................................................................................................................................................................
6. Certified and cashier’s checks (including dividend checks), letters of credit, and travelers’ checks sold for cash,
and amounts due to Federal Reserve bank (transit acount) (must agree with item 18 of “Liabilities” ) .............
7.
T o t a l D em and D e p o s its ..............................................................................................................................................
SCHEDULE F—TIME DEPOSITS
1. Deposits o f individuals, partnerships, and corporations (including $....................................... deposits accumulated
fo r payment o f personal loans) (must agree with item 14 of “ Liabilities” ) ............................................................................................................................
2. Deposits o f United States Government $..................................... , Postal savings deposits $........................................................................................................
3. Deposits of States and political subdivisions............................................................................................................................
.........................................................
4. Deposits of banks in the United States (including private banks and American branches of foreign b a n k s)..................................................................
5. Deposits of banks in foreign countries (including balances of foreign branches of oilier American banks).......... ...........................................................
6.
T otal T im e D eposits ................................................................................................................................................................
F E D E R A L R E S E R V E BANK
O F NEW YORK
June 17, 1946.
CHANGE IN W E E K L Y R ESERVE COM PU TATION PERIOD
To each Member Bank in the Boroughs of Manhattan, Brooklyn
and The Bronx o f the City of New YorTc, and in the City o f Buffalo:
Section 3(a) of Regulation D of the Board of Governors of the Federal Reserve System
provides that deficiencies in reserve balances of member banks in central reserve cities and
in reserve cities shall be computed on the basis of average daily net deposit balances covering
weekly periods, and that such weekly periods shall end at the close of business on days to be
fixed by the Federal Reserve banks with the approval of the Board of Governors.
Friday has heretofore been fixed as the day ending the weekly reserve computation period
for member banks in the Boroughs of Manhattan, Brooklyn and The Bronx of the City of
New York, and in the City of Buffalo, and those banks have been required to make a report
of net demand and time deposits covering each weekly period on our Form R.B. 20.
Because many banks in the Second Federal Reserve District are remaining closed on
Saturdays during the summer months, we are, with the approval of the Board of Governors,
fixing Thursday, instead of Friday, as the last day of each weekly reserve computation period
following the period ending June 21, 1946. Our current Form R.B. 20 should be used to
report net demand and time deposits for the week ending June 21, 1946 and thereafter our
revised Form R.B. 20 should be used. Copies of this revised form will be sent to you shortly.
In reporting on the revised form for the period beginning June 22 and ending June 27,
1946, no entry should be made on the line opposite Friday. Any deficiencies in reserves for
that period will be computed on the basis of average balances for the six days included in
the period.
We are transmitting to you herewith a copy of our circular No. 3099, dated June 17,1946,
entitled “ Reserves of Member Banks” which contains general information regarding reserve
requirements and which incorporates the change in the weekly reserve computation period
referred to herein.
A llan S proul,
President.
@FedFRASER