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C I R C U L A R N O . 207
(Superseding Circulars Nos. 43 and 103)
FEDERAL RESERVE BANK r4*A*«*-±+ 17*7^
OF N E W YORK
ACCOUNTING
DEPARTMENT
September 13, 1919.
IMPORTANT
New Method of Reporting Reserves Effective October 1, 1919.
To ALL MEMBER BANKS IN THE SECOND FEDERAL RESERVE DISTRICT,
DEAR SIRS:
Since the inauguration of the Federal Reserve System the reserves of member banks in
this Federal Reserve district have been calculated by this bank on the basis of monthly averages, but in other districts a number of other plans, some on a semi-monthly, some on a weekly
and some on a daily basis, have been in operation. The Federal Reserve Board now feels that
the time has arrived, after a trial of these various plans, to follow throughout the system a
uniform method of calculating reserve balances, and has accordingly adopted the following
basis effective October 1, 1919.
For banks in reserve and central reserve cities: a weekly average.
For banks in other places: a semi-monthly average.
Beginning October 1, therefore, we will request our member banks
(1)
In the Boroughs of Manhattan, Brooklyn, and Bronx, in New York
City, and in the cities of Albany and Buffalo, to send us a weekly
report, and
(2)
In all other places to send us a semi-monthly report showing the
net deposits each day from which the average required reserve has
been calculated.
We send herewith a supply of Forms A and B for use in reporting. Form A contains
the report, which should be mailed to us weekly or semi-monthly, as the case may be. Form
B, which indicates the method to be used in computing reserves, is not to be mailed to us
but may be of use to member banks in obtaining the correct figures to report on Form A.
We have also prepared an analysis sheet by the use of which those member banks which
so desire may readily determine each day their exact available reserves. Copies of this analysis
sheet together with a brief explanation describing its operation will be sent on request.
Very truly yours,
Deputy Governor.
{NOTE—Deficient Reserves. The regulations of the Federal Reserve Board prescribe a penalty on deficient reserves
of 2 % above our 90-day discount rate, which is at present |4%%. A penalty of 6%%, therefore, for deficiencies in
reserve will be calculated on the basis of the above reports and will be assessed monthly.)
RB.-14.1-15M-U-2a
FORM PREPARED BY THE FEDERAL RESERVE BOARD
FOR THE COMPUTATION OF RESERVES TO BE
CARRIED BY MEMBER BANKS WITH
FEDERAL RESERVE BANKS
Date
NET DEMAND DEPOSITS
1.
Deposits payable within thirty days not
including U. S. Government Deposits
and Items 2, 3, 4 and 5
$
2.
Balance due to Banks other than Federal
Reserve Bank (include Foreign Banks) $
3.
Amount due to Federal Reserve Bank
Deferred Credits
4.
$
Cashier's checks outstanding
.
.
. $
5. Certified checks outstanding
.
.
. $
Total due to banks (Items 2, 3, 4 and 5)
$
_
Less
Deductions of the following items are
permitted only from the total of Items
2, 3, 4 and 5. Should the total of Items
6, 7, 8 and 9 exceed the total of Items
2, 3, 4 and 5, both groups must be
omitted from the calculation.
6. Balances due from banks other than
Federal Reserve Bank and Foreign
banks
$
7.
Items with Federal Reserve Bank in
process of collection
. . . . .
8. Exchanges for Clearing House
9.
.
.
$
. $
Checks on other banks in the same place $
Total deduction (Items 6, 7,8 and 9)
$
10. Net Balance due to banks
11. Total Net Demand Deposits
TIME DEPOSITS
$
(Items 1 and 10)
$
12. Savings accounts (subject to not less
than thirty days' notice before payment)
$
13.
Certificates of deposit (subject to not less
than thirty days' notice before payment)
f
14.
Other deposits payable only after thirty
days
15.
Postal Savings Deposits
$
$
16. Total Time Deposits (Items 12, 13, 14 and 15)
$
J
ANALYSIS OF ACCOUNT
FOR T H E USE OF MEMBER BANKS
IN D E T E R M I N I N G AVAILABLE
RESERVE BALANCES
FEDERAL RESERVE BANK OF NEW YORK
ANALYSIS OF RESERVE ACCOUNT
It is of value and importance to a member bank to know each day the amount of its available reserve. By the use of a form, similar to that shown on the lower hall'
of this sheet, it is a very easy matter to analyze the account DUE FROM FEDERAL RESERVE BANK and arrive at the amount of available reserve.
To use this form it will not be necessary for the member bank to make any change whatever in its present method of keeping its account with the Federal Reserve
Bank. It will only be necessary to enter each item whether debit or credit going into the account under the date on which it is figured the corresponding entry will be
made on the books of the Federal Reserve Bank.
Member banks maintaining but one account with the Federal Reserve Bank can readily prove this analysis to their ledger account by adding to the current day's
available reserve all of the debit items and subtracting all credit items appearing under subsequent dates.
The figures shown in the analysis are taken from the specimen statement of account appearing immediately below.
MONTHLY STATEMENT OF RESERVE ACCOUNT
ACCOUNT OF THE
MONTH OF
July 1919
X NATIONAL BANK
D U E FROM F E D E R A L RESERVE BANK
DATE
DATE
AMOUNT
DATE
DEBIT B A L A N C E
BALANCE
14
CL
15
Re Disc
Currency
CL
16
Cpn Letter
Currency
CL
ID
3D
3D
ID
2D
3D
ID
2D
Re Disc
Currency
17
CL
Cpn Letter
Re Disc
1 D
11,000
2,300
1,400
20,000
8,000
16,000
2,100
6.000
350
3,000
12,500
5,000
25,000
2,000
9,500
400
6,000
14
t
t
15
16
17
5,000
600
16,500
10,000
t
t
t
t
Dft
18
84,315
14
94,915
15
103,165
16
84,865
17
87,265
"
ForCL
Wire Transfer
6.000 t
200
1,000
12,000
Note
Dft
9,000
800
1,500
11,500
15,000
25,000
1,000
12,500
Note
Dft
< i
"
ForCL
'' For C L
W i r e Transfer
Dft
•«
"
ForCL
* 1 D e t c . , i n d i c a t e s the Dumber of d a y s that should elapse between ihe d a t e items are forwarded a n d t h e .late it b e x p e c t e d they will be available on t h e books of the
Federal Reserve B a n k . T h i s i n f o r m a t i o n can U> easily d e t e r m i n e d by referring to the time schedule issued by the Federal Reserve B a n k ,
t Debits a n d c r e d i t ! e n t e r i n g i n t o a n a l y s i s on J u l y U a n d J u l y 16 a r e in this illustration all e n t e r e d u n d e r d a t e of J u l y 10.
-
•• •
F E D E R A L R E S E R V E B A N K O F N E W YORK
SHOWING AMOUNT A V A I L A B L E A S L E G A L R E S E R V E
i
ii
—
•
—
i
—
i
-•
I T E M S A V A I L A B L E J u l y 16 a n d b e f o r e
DATE
SENT
14
14
14
15
15
15
16
TOTAL
„-_.T
DEBIT
11
20
8
16
3
83
000
000
000
000
350
000
350
DATE
S E N T
—
•
ITEMS AVAILABLE J u l y 17
DATE
SENT
CREDIT
14
14
15
16
16
17
15
16
16
5 000
600
16 500
10 000
6 000
200
1 000
12 000
9 000
15 000
TOTAL
75 300
TOTAL
14
14
14
14
15
15
-
DEBIT
2
1
2
12
2
6
300
400
100
500
000
000
26 300
ITEMS
SEMT
CREDIT
16
16
16
16
800
1 500
11 500
25 000
TOTAL
38
AVAILABLE
DATE
SENT
15
16
17
17
800
TOTAL
DEBIT
6 000
5 000
9 500
400
J u l y 18
DATE
SENT
CREDIT
17
17
1 000
12 500
TOTAL
-,—-JL
•
RESERVE POSITION
R E S E R V E POSITION
Add yesterday's
Available Res.
Deduct
Today's Credits
Available
Reserve
Today
84
315
Average
167
665
ji To date
75
300
92
365
' Vet Demand
l * * t .
Tjme
™ ~ •*
Deposits
Add yesterday's
Available Res.
84 250
92 365
5
000
r-i n ™ «
510 000
«—».t7%68
Available
Reserve
Today
can
38 800
—
79 865
1
Required
9 8
no
Deduct
Today's Credits
Available
To date
92 365
9 »
Required
Reserve at 3% 15 3 0 0
Total Required
Reserve
84 250
Average
To date
S4 90R
™
_
Time
Deposits
'
987 000
p
515 000
Average
Required
To date
Deduct
Today's Credits
Average
Available
To date
86 115
Required
™
RESERVE POSITION
Add yesterday's
Available Res.
« ~ ™ « ' »
60, 0 9 0
Required
Reserve at 3% 1 5 4 5 0
Total Required
Reserve
84 540
Available
Reserve
Today
; Net Demand
Deposits
Time
Deposits
Average
Available
To date
Required
Reserve at 7 %
Required
Reserve at 3 %
Total Required
Reserve
In the illustration above it is assumed that the analysis was started on July 1(> and that the debit balance as shown by the statement on July 13 was all available by July
10. It is possible to trace readily the entries made on the analysis sheet from the account. It will be noted that all items available on or before July 16 have been entered under
that date while those available later have been entered under the proper subsequent dates. By the use of this analysis the available reserve balance for each day can be determined by adding to the previous day's available balance the debit items of the current day and deducting from the total the credit items of the current day.
.Member banks maintaining a collection account with the Federal Reserve Bank will find this form of use as an analysis of the collection account and as the basis of making
transfers from the collection to the reserve account.
The form also provides for showing the actual required reserve each day which figure should be arrived at from the form on which net demand and time deposits are calculated daily. (Form Ii. B. 14). It will be found desirable also to show the average required reserve to date for either the weekly or semi-monthly period, as the case may be, and
the average available reserve for the same period.
@FedFRASER