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BULLETIN No. I I MARCH 1, 1943 FEDERAL RESERVE BANK OF DALLAS INSJJRANEJS OF SHIPMENTS OF IRENCY, COIN, AND SECURITIES T o the Member Banks or the Eleventh Federal Reserve D istrict: Unless olherwise stated, alLreterences to the Federal Reserve Bank of Dallas vill include the head office^nd all o f its branches. The Federal Resefvje^Bank of Dallas holds open insurance policies under which registered maiHnipments made to or by this bank may be insured. These policies formerly cbverWLalJ risks except loss through theft by employes o f the sender or o f the addressee, but the policies have recently been amended to exclude coverage with r e j e c t to war Tisfej The terms and conditions under which insurance benefits unavailable are set forth in this bulletin. RESPONSIBILITY In making shipments of icurrepcy, coin, or securities, this bank undertakes merely to make delivery to tffieyjxtst officep^xpr^sS company, or other carrier, and any risk o f loss occurring subsequently.-u^such delivery is not assumed by this bank but is on the party ordering stich shiph^ent. Similarly, the risk o f loss on shipments of currency, coin and securities to\his bank occurring prior to the actual delivery thereof to this bank by the post office, express company, or other carrier, is not assumed by this bank but is on tlibssender. INSURANCE OF OUTGOING AND INCOMING SHIPMENTS OF CURRENCY AND COIN \ Shipm ents b y R egistered Mail. Although this bank does\|iot assume the risk of loss on such outgoing and incoming shipments, it will, unless otherwise instructed, arrange for insurance, to the extent permitted under the registered mail policies aforesaid, of shipments o f currency and coin made by it to member banks, and will also arrange for insurance, to the extent permitted under such policies, o f shipments o f currency sent to it by registered mail by member banks. Shipm ents b y E xpress. Shipments of currency and coin which are made to this bank by express will not be insured under the policies hereinabove ref erred to as the express company assumes the risk of loss and the rate charged by it is based on the declared value and includes a charge for the risk assumed by the express company under its shipping contract. ABSORPTION OF EXPENSE INCIDENT TO SHIPMENTS OF CURRENCY AND COIN The Federal Reserve Bank o f Dallas will absorb the expense o f transporta tion, including costs o f insurance obtainable under the registered mail policies aforesaid, incident to shipments of United States currency and coin to and from member banks when such shipments are ordered from this bank or are prepared and forwarded to this bank in accordance with the provisions o f this bulletin and Bulletin No. 5. W here shipments of one and two dollar bills in excess of $500 and of coin are made to this bank by express, this bank will absorb all expense o f such shipments. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) — 2— BULLETIN No. 11 NATURE OF INSURANCE COVERAGE The insurance provided under the registered mail insurance policies re ferred to herein covers all risks except so-called war risks and loss through theft by employes of the sender or o f the addressee. Risk attaches from the time o f leaving the office o f the sender until actual delivery lias been made to the office o f the addressee, whether delivery is effected in whole or in part by employes or agents o f the Post Office Department, sender, or addressee, and in the event o f nondelivery, covers until returned to the sender. In case o f the reforwarding o f any shipment, such shipment is covered until delivered at the correct or new address, or until returned to the sender. The policies contain the following clause eliminating war risk coverage: “ Notwithstanding anything herein contained to the contrary, this in surance is warranted free from capture, seizure, arrest, restraint, detain ment, confiscation, preemption, requisition or nationalization, and the consequences thereof or any attempt thereat, whether in time o f peace or war and whether lawrful or otherwise; also warranted free from all con sequences of hostilities or warlike operations (whether there be a dec laration of war or n o t), piracy, civil war, revolution, rebellion or insur rection, or civil strife arising therefrom.” W ith respect to losses incurred while property is in transit by messenger to or from the post office, the registered mail policies cover only the excess o f any amount which may be recoverable from any other insurance or surety covering such loss. The liability under such registered mail insurance policies is limited to $10,000,000 on property dispatched from any one sender to any one addressee on any one train, boat, or other conveyance. The uniform express receipt contains a provision to the effect that the express company shall not be liable for loss, damage, or delays caused by “ the hazards or dangers incident to a state o f war.” PROCEDURE FOR MAKING INSURANCE EFFECTIVE ON SHIPMENTS OF CURRENCY TO THE FEDERAL RESERVE BANK Shipments o f currency to this bank by registered mail may be insured under the registered mail insurance policies referred to for the account and risk of the sender, provided the following conditions are observed: (a ) On the day a shipment is made to this bank an advice should be sent by ordinary mail to the office to which the shipment is addressed, showing the name of the shipping bank, the number o f sacks or packages comprising the shipment, a description of the contents, and the amount o f insurance to be effected. The advice should also indi cate the amount o f postage paid when the shipment is sent by regis tered mail. A copy o f the advice should be placed in the shipment. (b ) The shipment wall be insured for the amount reported or declared, which amount may be more or less than the actual value o f the prop erty shipped, and in the event o f loss, the liability o f the insurers shall be the replacement cost o f the lost property or the market value thereof at the time of dispatch or at the time the loss becomes — 3— BULLETIN No. 11 known to this bank, whichever of the foregoing shall be the measure o f the actual loss sustained, but in no case shall the liability of the insurers exceed in the aggregate, exclusive o f interest, the sum for which the lost property was reported or declared. ( c ) The packing and sealing o f the package containing the property insured shall be witnessed by two persons who are employes o f the sender, and the sealed package shall be in charge o f a responsible person until deposited and registered at the post office, or shall be in the custody o f an armored car service in transit from the office o f the sender to the post office. ( d ) The contents o f all packages must be verified and enclosed in a strong wrapper, envelope, or cloth or canvas bag, well secured and sealed with wax, lead, or paper seals, or with other seals in any man ner acceptable to the post office at place of mailing. (e ) In order for shipments to this bank to be insured, they must be made by registered mail. Under no circumstances can a shipment to this bank be insured when sent by ordinary mail. (f) N o writing indicating the contents should appear on the outside of packages forwarded by registered mail. (g ) The post office registry receipt should be carefully preserved by the sender in order that it may be available as evidence in the event o f loss. INSURANCE ON SHIPMENTS OF SECURITIES The following securities shipped by a bank to this bank may be insured under the registered mail insurance policies re ferred to, provided the conditions contained herein with respect to the procedure for making insurance effective on incoming shipments o f currency are strictly complied with in connection with the shipment o f such securities. (a ) Coupons and maturing or called bonds forwarded for collection. (b ) Securities forwarded for sakekeeping, for sale or redemption, to be held as collateral to loans, government deposits or deposits o f bank ruptcy funds, for exchange of denomination, for exchange for se curities in registered form, or for exchange for securities which are not in registered form. Such shipments will be insured at the expense o f the sender. W here this bank has occasion to ship securities held by it for the purposes indicated above, such shipments will be made by registered mail and unless instructed to the contrary this bank will insure them as provided herein under the registered mail insurance policies referred to at the expense of the member bank. NOTICE OF LOSS In the event o f loss of a shipment insured under the registered mail insur ance policies referred to, claim will be made on behalf of the member bank for the amount for which the shipment is insured. Prompt notice o f loss should be given this bank, together with all available details regarding the loss. BULLETIN No. 11 — 4— INSURANCE OF SHIPMENTS OF SECURITIES MADE BY THE FEDERAL RESERVE BANK OF DALLAS AS FISCAL AGENT OF THE UNITED STATES United States Government securities upon original issue or in exchange for temporary certificates are shipped at the expense and risk of the United States under the Government Losses in Shipment Act. The interest and responsibility o f the United States in such shipments ceases with the delivery by the post office. Therefore, the addressee accepting delivery at the post office must transport such shipments at its own risk from the post office to its place o f business and provide for such insurance as it may desire. Stocks o f unissued W ar Savings Bonds shipped by this bank to issuing agents are the property o f the United States. Hence, such shipments are made at the expense and risk o f the United States and the interest o f the Government does not cease upon delivery by the post office. ACCEPTANCE Each member bank availing itself o f the insurance facilities offered by the Federal Reserve Bank o f Dallas under the registered mail insurance policies referred to shall by such action be understood to have agreed to the terms and conditions o f this bulletin, and to have understood and agreed that it will arrange to provide whatever protection it may desire to cover so-called war risks. The right is reserved to withdraw, add to, or amend at any time any o f the provisions o f this bulletin. Respectfully, R. R. G IL B E R T President
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