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FEDERAL RESERVE BANK
OF NEW YORK
Fiscal A g e n t of the United States
(-Circular No. 2 7 5 1 "1
L January 7, 1944
J
WAR LOAN DEPOSIT ACCOUNTS
To all incorporated banks and trust companies
in the Second Federal Reserve District:
Enclosed is a copy of Treasury Department Circular No. 92
(Revised) dated December 15, 1943, relating to Special Deposits of
Public Moneys under the Act of Congress approved September 24,
1917, as amended (Second Liberty Bond Act, as amended).
This
circular regarding War Loan Deposit Accounts supersedes the earlier
revision dated April 14, 1943, as amended.
Also enclosed are revised copies of Form H-5, "Application for
Deposits," and Form J-5, "Resolutions Authorizing Application for
Deposits," which are referred to in paragraph 2 of the new circular.
These revised forms should be used by any incorporated bank or trust
company which hereafter applies for original qualification as a special
depositary of public moneys, and by any presently qualified depositary
which applies for qualification in an increased amount.
ALLAN
SPROUL,
President.
SPECIAL DEPOSITS OF PUBLIC MONEYS UNDER THE ACT OF CONGRESS APPROVED SEPTEMBER 24, 1917,
AS AMENDED. (SECOND LIBERTY BOND ACT, AS AMENDED.)
1943
Department Circular No. 92 (Revised)
Fiscal Service—Bureau of Accounts
TREASURY
DEPARTMENT,
Q f f i c e
q f
t h e
S e c r e t a r y
Washington, December
'
15, 19US.
To Federal Reserve Banks and other incorporated banks and trust companies in the United
States (including the District of Columbia), the Territories of Alaska and Hawaii,
Puerto Rico, the Virgin Islands, and the Panama Canal Zone:
Department Circular No. 92 (Revised), dated April 14, 1943, as amended, is revised to
read as follows:
Banks and trust companies designated and qualified pursuant to the terms of this circular
are given the title "Special Depositaries of Public Moneys" and are hereinafter referred to
as "Special Depositaries." Special Depositaries are permitted to make payment in the form
of a deposit credit f o r the purchase price of United States Government obligations purchased
by such banks or trust companies f o r their own account or f o r the account of their customers,
who enter their subscriptions through these banks or trust companies, when this method of
payment is permitted under the terms of the circulars inviting subscriptions to such issues.
The deposit credits set up under this designation are called " W a r Loan Deposit Accounts."
Under this arrangement the large sums of money raised by the Treasury through financing
operations are left on deposit in local banking institutions until the Treasury needs to withdraw them to meet Government expenditures thus avoiding the dislocations in the banking
system which might result from immediate withdrawal of such funds. Pursuant to recent
amendments to the Federal Reserve Act, these deposit accounts will, f o r the duration of the
War and f o r six months after the cessation of hostilities, be exempt from insurance assessments of the Federal Deposit Insurance Corporation and from the reserve requirements of
the Federal Reserve System.
GENERAL PROVISIONS
1. All incorporated banks and trust companies in the United States (including the District of Columbia), the Territories of Alaska and Hawaii, Puerto Rico, the Virgin Islands,
and the Panama Canal Zone, are hereby designated, subject to qualification in accordance
with the provisions of this circular, as Special Depositaries f o r receiving deposits of public
moneys as authorized by the A c t of Congress approved September 24, 1917, as amended
(Second Liberty Bond Act, As Amended), hereinafter referred to as the Act ; Provided, That
no bank or trust company shall perform any o f the acts covered by this designation until it
has qualified so to act in the manner herein prescribed.
2. Any incorporated bank or trust company desiring to participate in the deposit of
public moneys as authorized by the A c t should apply f o r qualification through the Federal
Reserve Bank of its district. Such application must be in Form H - 5 , hereto attached, and
must be accompanied by a certified copy of a resolution, duly adopted by the Board of Directors of the applicant, in Form J - 5 , hereto attached. For the purpose of this circular, banks
and trust companies located in the Territories of Alaska and Hawaii will be considered as
being located in the San Francisco Federal Reserve district, and banks and trust companies
located in Puerto Rico, the Virgin Islands and the Panama Canal Zone will be considered
as being located in the New York Federal Reserve district. No incorporated bank or trust
company which has made application f o r qualification shall act as a Special Depositary
under the terms of this circular until it receives f r o m the Federal Reserve Bank notice of
approval of the application.
3. Special Depositaries already qualified to a sufficient amount pursuant to Department
Circular No. 92 (Revised) dated April 14, 1943, as amended, will not be required to file new
formal applications or resolutions, but they will, by the acceptance or retention of deposits
after December 31,1943, be conclusively presumed to have assented to all the terms and provisions hereof, and to the retention of collateral security theretofore pledged as collateral
security hereunder.
4. A Special Depositary, heretofore or hereafter qualified, which having subscribed to an
offering of United States bonds, notes, certificates of indebtedness, or Treasury Bills and
having in due course received an allotment on its subscription refuses to receive the said
allotment and to make payment therefor, may be discontinued. A Special Depositary discontinued f o r any reason may be requalified by the Federal Reserve Bank of its district upon
full compliance with the terms of this circular.
( i )
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2
5. In fixing the maximum amount of deposits f o r which it will apply, the applicant bank
or trust company should be guided by the amount of the payments which it expects to make,
on subscriptions made by or through it for bonds, notes, certificates of indebtedness, and
Treasury Bills of the United States issued under authority of the Act, and, as well by any
statutory limitations upon the amount of deposits which the applicant bank or trust company
may receive from any one depositor.
6. Determination as to the maximum amount of deposits for which a Special Depositary
may qualify is committed to the Federal Reserve Banks acting under the direction of the
Secretary of the Treasury.
COLLATERAL SECURITY
7. Special Depositaries will be required, before receiving deposits, to pledge as collateral security f o r such deposits securities of any of the following classes, to an amount, taken
at the rates and conforming to the conditions provided below, at least equal to such deposits;
provided, that no collateral security shall be required f o r such part of the deposits as are
insured under section 12B of the Federal Reserve Act, as amended:
(a) United States Government Securities.—Transferable bonds, notes, certificates of
indebtedness, and Treasury Bills of the United States Government of any issue, including
interim certificates or receipts f o r payment therefor, except such securities as by the terms
of their issue are not acceptable as security f o r deposits of public moneys; all at face value.
(b) Obligations Guaranteed by the United States.—Obligations fully and unconditionally guaranteed by the United States both as to principal and interest; all at face value.
(c) Obligations of Government Agencies, Etc.—Obligations of the Federal Land Banks,
Federal Intermediate Credit Banks, Federal Home Loan Banks, the Federal National Mortgage Association, and obligations of Public Housing Agencies (as defined in the United States
Housing Act of 1937, as amended) when secured to the full amount thereof by a Requisition
Agreement with the Federal Public Housing Authority; all at face value.
(d) Insular and Territorial Government Securities.—Bonds of Puerto Rico, bonds and
certificates of indebtedness of the Philippine Islands, and bonds of the Territory of Hawaii,
all at market value, not to exceed face value.
(e) State Bonds.—Bonds of any State of the United States, at market value, not to
exceed face value.
( / ) State Notes, Certificates of Indebtedness, and Warrants.—Approved notes, certificates of indebtedness, and warrants issued by any State of the United States; at 90 percent
of market value, not to exceed face value.
(ff) County and Municipal Securities.—Approved bonds of any county, city, or other
political subdivision in the United States; and approved notes, certificates of indebtedness,
and warrants with a fixed maturity issued by any county or city in the United States, which
are direct obligations of the county or city as a whole, or which are payable from general
taxes levied on all taxable property in such county or city; provided the obligations meet the
requirements of the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System and the Federal Deposit Insurance Corporation f o r classification by bank
examiners under Group I, as follows:
Group I securities are marketable obligations in which the investment characteristics are
not distinctly or predominantly speculative. This group includes general market
obligations in the four highest grades and unrated securities of equivalent value.
Obligations of counties, cities, and other political subdivisions, rated in one of the three
highest grades by a recognized investment service organization regularly engaged in the
business of rating or grading bonds, may be accepted at 90 percent of market value, not to
exceed face value, and other qualified obligations of counties, cities, and other political subdivisions may be accepted at 80 percent of market value, not to exceed face value.
(h) Corporate Securities.—Approved bonds, notes, and other obligations of domestic
corporations, provided they meet the requirements f o r classification under Group I as defined
in subparagraph ( g ) — " C o u n t y and Municipal Securities"—at 80 percent of market value,
not to exceed face value.
( i ) Commercial and Agricultural Paper and Bankers' Acceptances.—Commercial and
agricultural paper and bankers' acceptances having a maturity at the time of pledge of not
to exceed six months, and notes of correspondent incorporated banks or trust companies
secured by such commercial or agricultural paper or bankers' acceptances, all of which are
approved by the Federal Reserve Bank of the district in which the depositary is located; at
80 percent of face value.
8. The Secretary of the Treasury reserves the right to require all or any stated percentage of deposits received by any bank pursuant to the provisions of this circular and not
16-37794-1
3
insured under section 12B of the Federal Reserve Act, as amended, to be secured by pledge of
United States Government securities or obligations guaranteed by the United States as defined
in subparagraphs 7 (a) and 7 (b) above.
9. The stipulations as to the rates at which collateral may be accepted hereunder are
intended to indicate maximum values only and the right is expressly reserved to call f o r or
require additional collateral security at any time.
10. The approval and valuation of securities is committed to the several Federal Reserve
Banks, acting under the direction of the Secretary of the Treasury. The withdrawal of securities, the pledge of additional securities, and the substitution of securities shall be made
f r o m time to time as required or permitted by the Federal Reserve Banks, acting under like
direction.
CUSTODY OF SECURITIES
11. All securities accepted as collateral security f o r deposits hereunder must be deposited
with the Federal Reserve Bank or branch of the district in which the depositary is located, as
fiscal agent of the United States, or by the direction of and subject to the order of such
Federal Reserve Bank or branch, as fiscal agent of the United States, with a custodian or
custodians within the United States designated by such Federal Reserve Bank, and under such
terms and conditions as it may prescribe.
HOW DEPOSITS ARE TO BE MADE
12. Each qualified Special Depositary will be required to open and maintain or continue
f o r the account of the Federal Reserve Bank of its district, as fiscal agent of the United
States, a separate account f o r deposits to be made hereunder, to be known as the " W a r Loan
Deposit Account."
13. Qualified Special Depositaries, if and to the extent from time to time hereafter
authorized by the Secretary of the Treasury, may be permitted to make payment by credit,
when due, to a War Loan Deposit Account, of amounts payable on subscriptions made by or
through them f o r bonds, notes, certificates of indebtedness, and Treasury Bills of the United
States issued under authority of the Act of September 24, 1917, as amended. In order to
make payment by credit to a War Loan Deposit Account, the Special Depositary must, on or
before the date when such payment is due, notify the Federal Reserve Bank of the district of
such intention and issue a certificate of advice to such Federal Reserve Bank, stating that a
sum specified has been deposited with such depositary f o r the account of such Federal Reserve
Bank, as fiscal agent of the United States, in the War Loan Deposit Account. Such certificate
of advice will be furnished in the form and manner prescribed by the Federal Reserve Bank.
14. The amount deposited with any Special Depositary shall not in the aggregate exceed
at any one time (a) the maximum amount f o r which it shall have been qualified as a depositary, nor ( 6 ) the aggregate amount of the collateral security pledged by it taken at the rates
hereinbefore provided, excepting that part of the deposits insured under section 12B of the
Federal Reserve Act, as amended.
WITHDRAWAL OF DEPOSITS
15. All deposits will be payable on demand without previous notice. Calls f o r withdrawals of deposits with Special Depositaries will be made by direction of the Secretary of
the Treasury through the Federal Reserve Banks, and such depositaries will be required to
arrange for payments of such calls in funds that will be immediately available on the payment
due date.
EXEMPTION FROM INSURANCE ASSESSMENTS AND RESERVE REQUIREMENTS
16. The Act of Congress, approved April 13, 1943, contains the following provisions
relative to exemption of " W a r Loan Deposits" f r o m (a) assessments f o r insurance by the
Federal Deposit Insurance Corporation, and (b) the reserve requirements of member banks
of the Federal Reserve System:
" * * * the second sentence of paragraph (1) of subsection (h) of section 12B
of the Federal Reserve Act (U. S. C., title 12, sec. 264 (h) ( 1 ) ) , as amended, is hereby
further amended by substituting a colon f o r the period at the end thereof and adding
the following: 'and 'provided further, That until 6 months after the cessation of hostilities in the present war as determined by proclamation of the President or concurrent
resolution of the Congress any balance payable to the United States by any insured bank,
whether represented by a deposit account or otherwise, arising solely as a result of subscriptions made by or through such insured bank f o r United States Government securities issued under authority of the Second Liberty Bond Act, as amended, shall be
excluded f r o m the definition of "deposit" f o r the purpose of determining the assessment
base.
16—37794-1
4
"SEC. 2. The last sentence of section 19 of the Federal Reserve Act (U. S. C., title
12, sec. 4 6 2 a - l ) be amended by substituting a colon for the period at the end thereof and
by adding the following: 'Provided, That until 6 months after the cessation of hostilities
in the present war as determined by proclamation of the President or concurrent resolution of the Congress no deposit payable to the United States by any member bank
arising solely as the result of subscriptions made by or through such member bank for
United States Government securities issued under authority of the Second Liberty Bond
Act, as amended, shall be subject to the reserve requirements of this section.' "
17. The right is reserved to amend or supplement or revise the provisions of this circular
at any time or from time to time.
D. W .
BELL,
Acting Secretary of the Treasury.
Attachments.
FORM H - 5 — B U R E A U OF ACCOUNTS.
(Revised April 14, 1943)
APPLICATION FOR DEPOSITS
(City and State)
(Date)
To the Federal Reserve Bank
, fiscal agent of the United States:
The undersigned bank or trust company, in accordance with the provisions of Treasury Department
Circular No.92 (revised December 15,1943),and pursuant to due action of its board of directors, hereby makes
application for the deposit of public moneys, with it from time to time under the Act of Congress approved
September 24, 1917, as amended, the aggregate amount of such deposits not to exceed at any one time
—
; and assigns and agrees to pledge, from time to time to and with the Federal Reserve
Bank of
, as fiscal agent of the United States, as collateral security for
such deposits as may be made from time to time pursuant to this application, securities of the character and
amount required by said circular.
By
President (Vice
President).
Street
City or town
_
State
FORM J-5—BUREAU OF ACCOUNTS.
(Revised April 14, 1943)
RESOLUTIONS AUTHORIZING APPLICATION FOR DEPOSITS
(City and State)
(Date)
I hereby certify that the following resolutions were duly adopted at a meeting of the board of directors
of the below-named bank (trust company), which meeting was duly called and duly held on the
day of —
, 194-.., a quorum being present, and that the said resolutions were
spread upon the minutes of said meeting:
Resolved, That in accordance with the provisions of Treasury Department Circular No. 92 (revised December 15, 1943), this bank (trust company) makes application for the deposit of public moneys with it from time
to time under the Act of Congress approved September 24, 1917, as amended, the aggregate amount of such
deposits not to exceed at any one time $
; and assigns and agrees to pledge from time to
time to and with the Federal Reserve Bank of
_, as fiscal agent of the
United States, as collateral security for such deposits as may be made from time to time, pursuant to such
application, securities of the character and amount required by said circular; and
Resolved, That the president, or any vice president, or cashier, or assistant cashier, or secretary, or
assistant secretary, or treasurer, or assistant treasurer, of the undersigned bank (trust company) is hereby
authorized ce make application, assignment, and agreement as aforesaid, and from time to time to deliver
to and pledge with said Federal Reserve Bank, or any custodian or custodians appointed by it, securities of
the undersigned bank (trust company) of a character and amount at least sufficient to secure such deposits
according to the terms of said Treasury Department circular, and from time to time to withdraw securities
and to substitute other securities and to pledge and deposit additional securities.
In witness whereof I have hereunto signed my name and affixed the seal of
(Name of bank)
(City and State)
Cashier
U. S. GOVERNMENT PRINTING OFFICE
16—37794-1
(Secretary).
G. D. 6.5—5M—1-44
F O R M H-5—BUREAU OF ACCOUNTS.
APPLICATION FOR DEPOSITS
(City and State)
(Date)
T o the Federal Reserve Bank of New York, fiscal agent of the United States:
The undersigned bank or trust company, in accordance with the provisions of Treasury
Department Circular No. 92 (revised December 15, 1943), and pursuant to due action of its board
of directors, hereby makes application for the deposit of public moneys, with it from time to time
under the Act of Congress approved September 24, 1917, as amended, the aggregate amount of
such deposits not to exceed at any one time $
; and assigns and agrees to
pledge, from time to time to and with the Federal Reserve Bank of New York, as fiscal agent of
the United States, as collateral security for such deposits as may be made from time to time
pursuant to this application, securities of the character and amount required by said circular.
By
President (Vice President).
Street
City or town and P. O. N o
State
F O R M J-5—BUREAU OF ACCOUNTS.
RESOLUTIONS AUTHORIZING APPLICATION FOR DEPOSITS
(City and State)
(Date)
I hereby certify that the following resolutions were duly adopted at a meeting of the board
of directors of the below-named bank (trust company), which meeting was duly called and duly
held on the
day of
, 194
, a quorum being present,
and that the said resolutions were spread upon the minutes of said meeting:
Resolved, That in accordance with the provisions of Treasury Department Circular No. 92
(revised December 15, 1943), this bank (trust company) makes application for the deposit of public
moneys with it from time to time under the Act of Congress approved September 24, 1917, as
amended, the aggregate amount of such deposits not to exceed at any one time $
;
and assigns and agrees to pledge from time to time to and with the Federal Reserve Bank of
New York, as fiscal agent of the United States, as collateral security for such deposits as may
be made from time to time, pursuant to such application, securities of the character and amount
required by said circular; and
Resolved, That the president, or any vice president, or cashier, or assistant cashier, or secretary, or assistant secretary, or treasurer, or assistant treasurer, of the undersigned bank (trust
company) is hereby authorized to make application, assignment, and agreement as aforesaid, and
from time to time to deliver to and pledge with said Federal Reserve Bank, or any custodian or
custodians appointed by it, securities of the undersigned bank (trust company) of a character and
amount at least sufficient to secure such deposits according to the terms of said Treasury Department circular, and f r o m time to time to withdraw securities and to substitute other securities and
to pledge and deposit additional securities.
In witness whereof I have hereunto signed my name and affixed the seal of
(Name of bank)
(Seal of Applicant)
(City and State)
Cashier {Secretary).
@FedFRASER