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FED ERAL RESERVE BAN K O F D A L L A S F IS C A L . A G E N T O F T H E U N IT E D S T A T E S Dallas, Texas, May 17, 1946 MODIFICATION OF VARIOUS DEPARTMENT CIRCULARS GOVERN ING ISSUES OF TREASURY BONDS RESTRICTED AS TO OWN ERSHIP BY COMMERCIAL BANKS WHICH ACCEPT DEMAND DEPOSITS To All Banking Institutions in the Eleventh Federal Reserve District: There is quoted below a press statement released by the Treasury Department today with respect to an amendment to outstanding Treas ury offering circulars which will permit commercial banks to hold a limited amount of the restricted bond issues for trading purposes: “ In order to enable banks to render better service to individuals and corporations wishing to buy or sell restricted Government secu rities, Secretary Vinson announced today that he had amended Treasury regulations so as to permit commercial banks to hold a limited amount of the restricted issues for trading purposes. “ The limit on holdings is 1 percent of demand deposits, excluding War Loan deposits and interbank deposits, or $500,000, whichever is less. The bonds so held shall be in addition to and shall be held in an account separate from the bonds of such issues which have been otherwise acquired. “ The change was made after consultation with Federal Reserve authorities, who agreed that it would be helpful particularly to small non-bank investors.” A copy of Treasury Department Circular No. 787, which incorporates the details and enumerates the issues affected, is reproduced on the reverse side hereof. Your attention is called to the fact that the amendment of the Depart ment’s regulations is not intended to permit banks to buy and hold addi tional bonds for investment or to create a trading account merely for the bank’s own benefit. On the contrary, it is intended to facilitate transac tions by bank customers in cases where it is the bank’s practice to buy and sell other issues of Treasury securities directly with such customers. Yours very truly, R. R. GILBERT President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)