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F E D E R A L R E S E R V E BAN K
O F NEW YORK
Fiscal A g en t o f the U nited States

r Circular N o. 3 5 7 5 "I
L
A ugust 8, 19S0
J

DEPOSIT OF FEDERAL TAXES WITH DEPOSITARY BANKS
AND FEDERAL RESERVE BANKS

Discontinuance of Special Draft for Credit in
Treasury Tax and Loan Account

To all Banks and Trust Companies
in the Second Federal Reserve D istrict:

The Secretary of the Treasury has announced the discontinuance,
effective September 1, 1950, o f Special Drafts for credit in Treasury
Tax and Loan Accounts covering Federal taxes deposited by employers
directly with Federal Reserve Banks. This action has been taken in
the interest o f economy and efficiency in operations.
W e enclose amendments, dated July 20, 1950, to Treasury Depart­
ment Circulars No. 92 (Revised) and No. 848, which revoke the pro­
visions in these circulars relating to Special Drafts for credit in
Treasury Tax and Loan Accounts. W e also enclose a copy of our
Operating Circular No. 18, Revised September 1, 1950, reflecting these
amendments.
Additional copies o f this circular and o f the enclosures will be
furnished upon request.




A

llan

S proul,

President.

SPECIAL DEPOSITS OF PUBLIC MONEYS UNDER THE ACT OF CONGRESS
APPROVED SEPTEMBER 24, 1917, AS AMENDED (SECOND LIBERTY BOND
ACT, AS AMENDED)

1950
Departm ent C ircular N o. 92 (Revised)
F irst Amendment

TREASURY DEPARTMENT,
O f f ic e

F iscal Service
Bureau o f A ccounts

of th e

Secretary,

Washington, July 20, 1950.

To Federal Reserve Banks and other incorporated banks and trust companies in the United
States (including the District of Columbia), the Territories o f Alaska and Hawaii, Puerto
Rico, the Virgin Islands, and the Panama Canal Zone:
Department Circular No. 92 (Revised), dated November 10,1949, is hereby amended, effec­
tive September 1, 1950, as follows:
By deleting subparagraph 13(c), under the section entitled “ Deposits in Treasury Tax
and Loan Account” ;
By deleting paragraph 17, under the section entitled “ How Deposits Are To Be
Made” ;
By deleting the heading and the succeeding paragraphs 18 through 22, comprising the
entire section entitled “ Special Draft for Credit in Treasury Tax and Loan Account” ;
By deleting Exhibit C entitled “ Special Draft for Credit in Treasury Tax and Loan
Account” ;
And by renumbering paragraphs 23 and 24, under the section entitled “ Withdrawal
o f Deposits,” to read 17 and 18, respectively.




(S ig n e d ) JO H N W . S N Y D E R ,

Secretary of the Treasury.

U. S. GOVERNMENT PRINTING OFFICE

16--- 6 2 1 4 3 - 1

REGULATIONS GOVERNING THE DEPOSIT WITH FEDERAL RESERVE
BANKS AND DEPOSITARY BANKS OF EMPLOYER AND EMPLOYEE
TAXES UNDER THE FEDERAL INSURANCE CONTRIBUTIONS ACT
AND OF INCOME TAX WITHHELD ON WAGES UNDER SECTION 1622
OF THE INTERNAL REVENUE CODE
(Applicable to Wages Paid on or after January 1,1950)

1950

Departm ent C ircular N o. 848
F irst A m endm ent

TREASURY DEPARTMENT,
O f f ic e

F iscal S ervice
Bureau o f A ccoun ts

of th e

Secretary,

Washington, July 20, 1950.

To Federal Reserve Banks, incorporated banks and trust companies, and others concerned:
Department Circular No. 848, dated November 10, 1949, is hereby amended, effective
September 1, 1950, by deleting subparagraph E, under section 10 entitled “ Functions to be Per­
formed by Federal Reserve Banks,” and by substituting in lieu thereof the following:
“ ( E) Perform the necessary functions to provide for crediting deposits of Federal
taxes in Treasury Tax and Loan Accounts of depositary banks, with respect to deposits
of such taxes made by employers with banks acting in their capacity as Depositaries for
Federal Taxes.”




(Signed) JOHN W. SNYDER,
Secretary of the Treasury.

U. S. GOVERNMENT PRINTING OFFICE

1*5--- 6 2 1 4 4 -*

DEFENSE LOAN POLICY
A n A n n o u n c e m e n t A d o p t e d J o i nt l y by N a t i o n a l and State S u p e r v i s o r s
o f B a nk s and O t h e r L e n d i n g Instituti ons
T h e President o f the U n ite d States in his message to the C on g re s s on
July

19,

1950, poin ted out that as a further im portant s a fe g u a rd against

inflation w e shall need to restrain credit expansion, and that if we are to be
successful there must be sensible and restrained action by businessmen, laborers,
farm ers, and consum ers.

T h e need f o r the exercise o f restraint is all-embracing.

It applies alike to gov ern m en ta l agencies, national and State, as well as to
private institutions and individuals.
A cc o rd in g ly , the B o a r d o f G o v e r n o r s o f the F ed era l R eserve System, the
C o m p t r o l le r o f the Currency, the Federal D e p o s it Insurance C o r p o r a t i o n , the
H o m e L o a n Bank B oa r d , and the N ation al A sso cia tion o f Supervisors o f State
Banks urge that banks and all oth e r institutions en ga ged in extending credit
exercise special care in their lending and investment activities.
T h e banks and o th e r lending institutions o f the country have d em onstrated
by their loyal response at critical p eriods in the past that they will stand united
with their G overnm ent in the situation that n ow confronts us.
Officials o f associations o f lending institutions have called upon banks and
o th e r financial institutions to decline to make loans to business or consumers
which might be used f o r speculative purposes o r otherw ise interfere with defense
requirements.

T h e su pervisory authorities s tron gly join in this request.

A ll officials o f the supervisory agencies will be g lad to c o n f e r with the
officers o f banks and oth er financial institutions, to counsel with them regardin g
this p r o g r a m o f credit restraint.
A s poin ted out by President T r u m a n , an a bn orm ally high civilian demand
f o r g o o d s a lo n g with an increased need f o r military materials is creating a
stron g upw ard pressure on prices.
A continuation o f the rapid g r o w th o f
credit resulting f r o m con su m er d em an d f o r houses and oth er g o o d s and specu­
lative accumulation o f inventories by business w ou ld add to inflationary pres­
sures anci seriously handicap the necessary expansion o f military p rod u ction .
T h e r e f o r e , lenders should carefully analyze all loan applications and avoid
m aking loans which w ou ld have these adverse effects.

August 4, 1950.




B oard of G overnors of t h e F ederal R eserve System
C om ptroller of t h e C u r re n cy
F ederal D eposit I n s u r a n c e C orporation
H ome L o an B a n k B oard
N a t io n a l A ssociation of S upervisors of Sta te B a n k s


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102