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FEDERAL RESERVE BANK
OF DALLAS

BULLETIN NO. 7
Effective March 1, 1943
(Superseding Bulletin No. 7,' dated
February 1, 1941)

CUSTODY OF SECURITIES
T o the Member Banks o f the—
Eleventh Federal Reserve D istrict:

)

Unless otherwise Stated,rail-references to the Federal Reserve Bank o f
Dallas will include the head Office and all o f^ its branches.
CONDITIONS UNDER W H ICHSECURITIES WILL BE ACCEPTED

Each member bank depositing/ either directly or through others, securities
with this bank or its branches, shalnby such action be understood to have agreed
to all'the terms and conditions of4his-bulletin.
Except as hereinafter specifically provided/ only securities which are ac­
tually owned by a member bank located in the Eleventh Federal Reserve
District and which are neither assigned-nor pledged will be accepted. Such
securities will be held in custody for the account, at the risk and subject only
to the order o f the member bank nam ed'as owner in the acknowledgment
issued by this bank.
.

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The Federal Reserve Bank o f Dallas will receiVe SiT9~hold for safekeeping
securities belonging to its member banks which are pledged to. secure public
deposits. Before accepting any such securities, .it
be necessary fo r the
member bank, together with the public body whose deposit is secured, to make
an application'to this bank upon a printed form, that has been prepared and
which will be furnished upon request.
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Will

All matured coupons should be detached before rprwarding securities o f
any character to this bank to be held in custody^
Y
Regardless o f any other provision o f this bulletin ahy bank or other party
shipping, or causing the shipment o f, securities to this bank shall by such action
be deemed to have agreed that the risk of loss on such shipments occurring'
prior to the actual delivery thereof to this bank by the post office, express com-'
pany or other carrier is not assumed by this bank but is on the sender. Like­
wise, any bank ordering shipments of securities from this bank shall by such
action be deemed to have agreed that this bank in making such shipments under­
takes merely to make delivery to the post office, express company or other
carrier, and that the risk o f loss occurring subsequently,to such delivery is. not
assumed by this bank but is on the party ordering such shipment.
Each bank or other party depositing securities with this bank, either directly
or through others, shall by such action be deemed to have agreed that this bank:
(1 ) will be responsible only for the exercise o f the same diligence with which
it cares for its own property ; (2 ) will not be liable for any loss of sucli secur­
ities when a loss is due to any cause other than lack o f such diligence; (3 ) will
not lie responsible for the genuineness, validity, or alteration o f or any defect in
such securities; and (4 ) will not be obligated to maintain any form o f insurance
for the account o f the depositor in relation to securities held in custody for it.
In the absence o f specific instructions to the contrary, this bank will en­
deavor to perform certain services as outlined herein with respect to maturing

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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BULLETIN No. 7

coupons and maturing, called, or exchangeable securities held in custody for
member banks, but will assume no liability for its failure to perform such
service. The redemption o f certain matured or called securities and the notice
hereinafter specified to be given o f the maturity o f securities held by this
bank is intended merely as an aid to member banks without relieving the
member bank o f its own duty to keep itself informed o f maturities and call
dates or other events affecting its own portfolio.
N o charge will be made for holding securities in custody, but charges will
be made to cover the cost o f transportation and insurance on incoming and out­
going shipments o f securities and coupons, for telephone and telegraph ex­
pense, and collection charges, if any, made by collecting banks.
ACKNOWLEDGMENTS

Non-negotiable and non-transferable acknowledgments will be issued to
cover unpledged securities sent to this bank to be held in custody. It will be
unnecessary to return these acknowledgments when securities are withdrawn,
since the securities covered thereby will be surrendered or otherwise disposed
o f upon receipt o f appropriate instructions over the authorized signature o f
an officer o f the member bank named in the acknowledgment as owner.
REGISTERED MAIL INSURANCE

Securities shipped to the Federal Reserve Bank o f Dallas by registered
mail may be insured under its policies at the expense o f the member bank, pro­
vided the shipments are prepared and forwarded in accordance With the provi­
sions o f this bank’s Bulletin No. 11 relating to insurance. Securities shipped by
this bank, other than those which are shipped as fiscal agent o f the United States,
will be forwarded by registered mail and insured to the extent possible under
its registered mail insurance policies at the expense o f the member bank unless
instructions are furnished to the contrary. Securities shipped by this bank as
fiscal agent o f the United States upon original issue or in exchange for tempo­
rary certificates, are insured under the Government Losses in Shipment Act
subject to the conditions outlined in this bank’s Bulletin No. 11 relating to insur­
ance. It is the practice o f this bank to effect coverage on either incoming or out­
going shipments o f securities on the basis o f the par value or approximate mar­
ket value if readily ascertainable, whichever is greater, in those cases where a
stated amount o f insurance is not specified. In the event o f loss, the Federal
Reserve Bank o f Dallas will make claim on behalf o f the member bank for the
amount for which the securities are insured.
COLLECTION OF MATURING UNPLEDGED SECURITIES

United States Governm ent Securities. (1 ) United States Government
securities and fully guaranteed obligations o f its agencies which are payable by
the Federal Reserve Bank o f Dallas as fiscal agent o f the United States
and held by it in custody will, in the absence o f specific instructions from the
owner, be withdrawn prior to maturity or redemption call date, and the pro­
ceeds credited to the member bank’s account on the due date.
(2 ) W hen an optional exchange or redemption privilege is offered, such
securities will not be redeemed except upon specific request o f the member bank
and no notice o f call will be given other than general notices customarily issued
under instructions o f the Secretary o f the Treasury.
(3 ) Temporary certificates issued.by the United States. Government and

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BULLETIN No. 7

its agencies, which are exchangeable by the Federal Reserve Bank o f Dallas
as fiscal agent, will be withdrawn from custody and exchanged for permanent
certificates when the permanent certificates become available.

S ecu rities O th er T h a n U nited States G ov ern m en t S ecu rities,
(1 ) Such securities will not be withdrawn from custody'and presented for col­
lection or exchange except upon specific instructions o f the owner member
bank. However, advance notice of the maturity date o f such securities will
be given and instructions as to disposition will be requested.
(2 ) The Federal Reserve Bank o f Dallas does not maintain a called
securities record, and therefore cannot undertake to advise banks when securi­
ties are called for redemption.
( 3 ) U pon receipt o f instructions over the authorized signature o f an
officer o f the member bank named in the acknowledgment as owner, maturing
securities will be handled fo r collection under the terms and conditions of
the current bulletin o f this bank governing the collection o f noncash items,
and disposition o f the proceeds, when available, will be made in accordance
with such instructions.
COLLECTION OF MATURING INTEREST COUPONS
ATTACHED TO UNPLEDGED SECURITIES

Coupons Attached to United States Government Securities. Coupons
attached to securities issued by the United States Government and fully
guaranteed obligations o f its agencies which are payable at the Federal Reserve
Bank o f Dallas as fiscal agent o f the United States and held in custody for a
member bank, will be detached in advance o f maturity and credited to the
member bank’s reserve account on the due dates, with appropriate advice.
Coupons Attached to Other than United States Government Secu­
rities. (1 ) Coupons attached to such securities payable in the cities or towns
in which the owner member banks are located, or payable outside o f the
United States, will be detached in advance o f maturity and returned to such
member banks.
(2 ) Coupons attached to all other such securities held in custody will be
detached in advance of maturity and entered for collection as noncash collec­
tion items under the terms o f the current bulletin o f this bank governing the
collection o f such items, unless the member bank gives this batik instructions
to the contrary, not later than thirty days prior to the maturity o f the coupons.
W hen payment is received credit will be given in the reserve accounts o f the
member banks with appropriate advices. Presentment will be made at the
place o f payment specified in the coupon unless the member bank furnishes
specific instructions regarding presentment.
(3 ) Coupons returned to this bank unpaid will be attached to the securi­
ties from which they -were detached, the member bank will be advised, and
thereafter no coupons attached to such securities will be entered for collec­
tion, except upon specific instructions of the member bank.
COLLECTION OF MATURING PLEDGED SECURITIES

(1 )
Advance notice of the maturity date of securities under pledge will
be given the owning bank and the pledgee, with the request that instructions
be furnished relative to disposition.
March 1,1943

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BULLETIN No. 7

(2 ) N o action will be taken relative to maturing securities under pledge
until appropriate instructions have been received authorizing the release
thereof.
(3 ) U pon receipt o f instructions over the authorized signature of an officer
of the member bank named in the acknowledgment as owner, accompanied by
appropriate instructions from the pledgee, maturing securities will be handled
for collection under the terms and conditions o f the current bulletin o f this
bank governing the collection o f noncash items, and disposition o f the pro­
ceeds. when available, will be made in accordance with such instructions.
COLLECTION OF MATURING INTEREST COUPONS ATTACHED.
TO PLEDGED SECURITIES

C ou p on s A ttached to U nited States G overn m en t Securities. (1 ) In
cases where pledge agreements so provide, coupons attached to securities
issued by the United States Government and fully guaranteed obligations of
its agencies which are payable at the Federal Reserve Bank o f Dallas as fiscal
agent of the United States will be detached in advance o f maturity date and
credited to the owner member bank's reserve account on the due date, with
appropriate advice to the bank.
(2 ) Coupons attached to securities o f the kind mentioned above which are
pledged as collateral to a customer’s note held by this bank, will not be
clipped and handled for collection unless specific instructions are received in
connection therewith.
(3 ) W hen a pledge agreement does not provide for disposition o f matur­
ing coupons, advance notice will be given and instructions as to disposition will
be requested.
C ou p on s A ttached to O th er than U nited States G overn m en t Secu­
rities. (1 ) In cases where pledge agreements so provide, maturing coupons
attached to such securities will be detached in advance o f maturity date and
entered for collection as noncash collection items under the terms o f the cur­
rent bulletin o f this bank governing the collection of such items. Presentment
will be made at the place o f payment specified in the coupon unless the member
bank furnishes specific instructions regarding presentment.
(2 ) Coupons attached to securities o f the kind mentioned above which
are pledged as collateral to a customer’s note held by this bank will not be
clipped and handled for collection unless specific instructions are received in
connection therewith.
(3 ) Coupons returned to this bank unpaid will be attached to the securities
from which they were detached, the member bank will be advised, and there­
after no coupons attached to such securities will be entered for collection
except upon specific instructions o f the member bank.
The right is reserved to withdraw, add to, or amend at any time, any of
the provisions o f this bulletin.
Respectfully,
R. R. G IL B E R T
President

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