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FEDERAL. RESERVE BANK OF DALLAS
F I S 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, August 11, 1947

PAYMENT OF ARMED FORCES LEAVE BONDS

To All Qualified Paying Agents in the
Eleventh Federal Reserve District:
The Treasury Department has requested this bank to forward to all paying agents in
this district the following information and instructions pertaining to the payment of
Armed Forces Leave Bonds:
Circular No. 811
Memorandum of Instructions issued in
conjunction with Circular No. 811
Circular No. 751, Second Revision
Circular No. 793, First Revision
A letter from the Acting Secretary of
the Treasury
In order that paying agents may become thoroughly familiar with the procedure to
be followed in making payment of these bonds, it is suggested that the enclosures be
read carefully. Particular attention is directed to Section VI, paragraph 10(a) of the
Memorandum of Instructions issued in conjunction with Circular No. 811, which empha­
sizes that agents must not make any payment which in any way effects or assists in
effecting the sale, discount, transfer or hypothecation of a bond, and that payment in any
form or manner before September 2, 1947, is not authorized under any circumstance.
Paying agents have an opportunity to render a public service by paying these bonds as
authorized and also a responsibility to see that payment is made only to the veteran
whose name is inscribed on the bond.
The act of paying an Armed Forces Leave Bond by an institution qualified as a paying
agent for savings bonds will automatically qualify it to act as a paying agent for the Leave
Bonds and any paying agent which intends to become a paying agent for Armed Forces
Leave Bonds is authorized to announce that fact at any time if it so desires, provided
such announcement is in accordance with the provisions of Section II, paragraph 4, of
the Memorandum of Instructions.
The procedure for submitting paid Armed Forces Leave Bonds to this bank and a
supply of the appropriate transmittal letter will be forwarded to all paying agents prior
to September 2. Charts for determining the redemption value of the bonds will also be
furnished at that time.
Inasmuch as the payment stamps used in connection with savings bonds are also to
be used for Armed Forces Leave Bonds, it is suggested that each agent examine its pay­
ment stamps immediately and requisition new stamps, if needed.
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)

Regulations and Instructions Governing Payment

of

ARMED FORCES

LEAVE

BONDS

by

Banks and Other Financial Institutions

F E D E R A L R E S E R V E BANK OF D A L L A S
FISCAL AGENT OF THE UNITED STATES

August L 1947

REGULATIONS GOVERNING PAYM EN TS B Y BANKS AN D OTH ER FIN AN ­
CIAL INSTITUTIONS IN CONNECTION W ITH THE REDEMPTION
OF ARM ED FORCES LE AV E BONDS
1947
Department Circular No. 811

TREASURY DEPARTMENT
Office of the Secretary
Washington, August 1 ,1 9 4 7

Fiscal Service
Bureau o f the Public Debt

Pursuant to the authority of the Second Liberty Bond Act, as amended, the following regula­
tions are hereby prescribed to govern payments by banks and other financial institutions in connec­
tion with the redemption of Armed Forces Leave Bonds.
Subpart A— AUTHORITY TO ACT
Sec. 325.1. Financial institutions authorized to act.— Commercial banks, trust companies, sav­
ings banks, savings and loan associations, building and loan associations (including cooperative
banks), credit unions, cash depositories, industrial banks, and similar financial institutions which
(a) are incorporated under Federal Law or under the laws of a State, Territory or Possession of the
United States or the District of Columbia; (b) in the usual course of business accept, subject to
withdrawal, funds for deposit or the purchase of shares; (c) are under the supervision of the
banking department or equivalent authority of the jurisdiction in which incorporated; (d) maintain
regular offices for the transaction of their business; and (e) are open daily and observe regular
business hours, are eligible to become paying agents of Armed Forces Leave Bonds and, upon quali­
fication in accordance with Section 325.2 hereof, are hereby authorized to make payments in con­
nection with the redemption o f Armed Forces Leave Bonds (hereinafter referred to as bonds),
subject to the provisions of this circular and any instructions issued hereunder.
Sec. 325.2. Application and qualification.— Federal Reserve Banks, as Fiscal Agents of the
United States, are authorized to qualify eligible institutions hereunder, and to terminate any such
qualification as hereinafter provided. Any financial institution qualified as a paying agent of United
States Savings Bonds is authorized hereunder to act as a paying agent of Armed Forces Leave
Bonds. The institution will not be required to effect a new formal Application-Agreement for the
purpose. The act of payment of an Armed Forces Leave Bond by a qualified paying agent of savings
bonds will qualify it as a paying agent of Armed Forces Leave Bonds and will render it subject to
the terms and conditions applicable to the payment of such bonds and subject to the same terms and
conditions as are set forth in the Application-Agreement entered into by it as a paying agent of
savings bonds. Any other eligible institution not now qualified to pay savings bonds but possessing
adequate authority under its charter that desires to qualify to make payments in connection with
the redemption of the bonds should make application to the Federal Reserve Bank of the Federal
Reserve District in which it is located1 on Application-Agreement Form PD 2125 (see appended
Exhibit A ), copies of which may be obtained from the appropriate Federal Reserve Bank. If the
application is approved, the Federal Reserve Bank will forward to the applicant a Notice of Qualifi­
cation Form PD 2126 (see appended Exhibit B), establishing that it is qualified to make payments
in connection with the redemption of the bonds. If the application is not, approved, the applicant
will be so advised in writing by the Federal Reserve Bank of the District.
Sec. 325.3. Termination of an agent’s qualification to pay bonds.— The Secretary of the Treasury
or under authority of the Secretary the appropriate Federal Reserve Bank, as Fiscal Agent of the
United States, may, by written notice, at any time and without previous demand or notice, terminate
the qualification of any paying agent hereunder. A duly qualified paying agent may discontinue mak­
ing payments at any time upon written notice to the Federal Reserve Bank, and its qualification
shall thereupon cease.
Subpart B— GENERAL
Sec. 325.4. Meaning of terms in this circular.—For the purpose of this circular, unless other­
wise indicated specifically, or by context, the terms:
(a)
“ Paying agent(s)” or “ agent(s)” shall mean any eligible financial institution duly qualified
pursuant to the provisions of this circular to make payments in connection with the redemption of
T o r the purpose o f this circular, eligible institutions in Puerto Rico, the Virgin Islands and the Canal Zone
shall be considered as being within the Second Federal Reserve District and shall make application to the Federal
Reserve Bank o f New York, and eligible institutions in Alaska, Hawaii and Guam shall be considered as being within
the Twelfth Federal Reserve District and shall make application to the Federal Reserve Bank of San Francisco.

— 1—

Armed Forces Leave Bonds including such branches located within the United States (including its
territories and possessions and the Canal Zone) and the Republic o f the Philippines, as it may wish
to utilize. For the purpose of this circular the term “ branches” shall include any bank facilities
which may be established with the specific approval of the Treasury Department at army and navy
installations and other places.
(b) “ Bond(s)” shall include only Armed Forces Leave Bonds unless otherwise indicated specifi­
cally or by context.
(c) “ Owner (s )” shall mean the living member or former member of the armed forces whose
name is inscribed in his or her own right on a bond.
(d) “ Federal Reserve Bank” includes each Federal Reserve Bank and any Branch thereof
authorized by the parent Federal Reserve Bank to conduct any of the transactions in connection
with which the term is used in this circular.
Sec. 325.5. Reimbursement of agents’ costs.— (a) Each paying agent shall be entitled to receive
reimbursement for its service for all bonds paid and accounted for by it during the period from
September 1, 1947 through December 31, 1947 at the rate of
15 cents each for the first 1,000 bonds
10 cents each for all over 1,000 bonds
Thereafter the number of Armed Forces Leave Bonds paid will be combined with the number
of savings bonds paid in computing reimbursement. In other words, paying agents will be entitled
to receive 15 cents each for the first 1,000 Armed Forces Leave Bonds and savings bonds combined
paid and accounted for in each calendar quarter, and 10 cents each for all over 1,000 bonds of either
kind paid and accounted for in that quarter. Each Federal Reserve Bank is authorized to establish
a definite and regular closing time for determining those paid bonds to be considered as accounted
for in a reimbursable period. Such closing time may be based upon a time that the paid bonds are
forwarded to, or received by, the Federal Reserve Bank and shall be uniformly applied throughout
the district of such bank. The scale of rates shall be applicable separately to the agent and to each
of its branches utilized in making payments under this circular, if the bonds paid by each are
separately scheduled and accounted for. The payment of such amount as the agent is entitled to
receive shall be made by the Federal Reserve Bank on behalf of the Treasury Department.
(b)
Paying agents shall not make any charge whatever to the owners of the bonds in connec­
tion with payments hereunder.
Sec. 325.6. Announcements, etc., of authority to pay bonds.— Any announcement of or any
reference to an agent’s authority to pay bonds may be made only in a form or manner or contain
such statements or substance as may be approved by the Secretary o f the Treasury or, under author­
ity of the Secretary, by the Federal Reserve Bank of the District, as Fiscal Agent of the United
States.
Subpart C— SCOPE OF AUTHORITY OF PAYING AGENTS
Sec. 325.7. General.— Only one Armed Forces Leave Bond has been or will be issued to any one
living member or former member of the armed forces discharged under honorable conditions and
otherwise entitled to receive a payment in such form (except for a very few instances where adjust­
ments have been necessary after payment was made). That bond will be inscribed only in such
member’s name. The lowest denomination bond authorized for issuance is $50 (except for $25 adjust­
ment bonds) and higher denomination bonds are issued only in multiples of $25. The bonds are
issued pursuant and subject to the terms of Treasury Department Circular No. 793. The bonds are
not transferable by sale, exchange, assignment, pledge, hypothecation or otherwise except as they
may be assigned to the Administrator of Veterans’ Affairs pursuant to the Armed Forces Leave A ct
of 1946, as amended, and regulations prescribed by that Administrator pursuant thereto. No claims
by attempted transferees or by persons loaning money on the security of the bonds will be recog­
nized. By the terms of the Armed Forces Leave Act of 1946, as amended, the bonds are exempt from
claims of creditors, including any claim of the United States, and shall not be subject to attachment,
levy, or seizure by or under any legal or equitable process whatever. Accordingly, no claims of credi­
tors, assignees for the benefit of creditors, trustees or receivers in bankruptcy or equity will be
recognized, and no payment of the bonds to any such persons will be made, either during the life­
time of the person whose name is inscribed on the bond or after his death. Upon the death of an
owner of a bond the bond becomes payable only to his survivors as defined in the Armed Forces
Leave Act. It is of the utmost importance that payment of the appropriate redemption value o f the
bonds be made only to and received by the persons entitled and strictly under the terms and condi­
tions of the bonds and applicable regulations.
— 2—

Sec. 325.8. Payments— to owner named on bond.—Subject to the terms of the bonds and to the
provisions of the regulations governing them and the provisions of this circular, an agent may make
payment of a bond only to the individual whose name is inscribed as the owner in his own right on
the bond: Provided, That such individual presents the bond to the agent for payment and that the
individual is known to the agent or establishes his identity to the complete satisfaction of the agent.
This authority shall be held to include the payment of bonds to a person whose name as inscribed
on the bond has been changed by marriage (but not otherwise). Both names must be shown, for
example— “ (Miss) Mary T. Jones, now by marriage Mrs. Mary J. Smith.”
Sec. 325.9. Specific limitations of payment authority.— An agent is not authorized to pay a bond:
(a) If the bond is presented for payment prior to September 2, 1947. Payment in any form or
manner to a bond owner before that date is not authorized in any circumstance.
(b) If the agent does not know or cannot establish to its complete satisfaction the identity of
the person requesting payment as the owner of the bond.
(c) If the owner requesting payment (form for which appears on the back of each bond) does
not sign his name in ink exactly as it is inscribed on the face of the bond and show his home
or business address. (See also Sec. 325.10 (d.).)
(d) If the bond appears to bear a material irregularity, for example, an altered, illegible, in­
complete or unauthorized inscription or issue date; or if a bond appears to be altered, or is
mutilated or defaced in such a manner as to create doubt or arouse suspicion with respect
to the bond or any essential part thereof.
(e) If the bond is marked “ DUPLICATE.” (An owner of a bond marked “ Duplicate” must sub­
mit it to the Treasury Department, Division of Loans and Currency, Washington 25, D. C.,
after completing the request for payment and having it duly certified by an authorized
certifying officer.)
(f) If the owner is deceased, incompetent or under legal guardianship or the owner’s name as
inscribed on a bond is changed for any reason other than marriage, or if it is known to the
agent that the owner has been declared, in accordance with law, incompetent to manage
his estate.
(g) If partial redemption is requested. (Only payment of the entire amount of principal and
interest due may be made and under no circumstances will an exchange be permitted for
bonds of a lower denomination.)
Attention is directed to Sec. 325.17 hereof for handling bonds of the foregoing classes of cases which
may not be paid by agents.
Subpart D—PAYMENT AND ACCOUNTING
Sec. 325.10. Examination of bonds presented for payment.— Before making payment of bonds
presented hereunder the agent:
(a) Shall determine that the person requesting payment as the “ owner” (as defined in this
circular) is known or his identity is established to the satisfaction of the agent.
(b) Shall examine the bond and determine that it is a bond which the agent is authorized to
pay under the provisions of this circular.
(c) If the request for payment on the back of the bond is already executed, shall determine
that the request is properly signed by the registered owner presenting the bond and that
his home or business address is shown.
(d) If the request for payment on the back of the bond has not been executed or has been
improperly executed by the owner presenting the bond, shall require such owner to prop­
erly sign the request and show his home or business address.
Sec. 325.11. Certification of requests for payment.— In view of the provisions of this circular
governing the payment of the bonds and the requirements as to the data to be endorsed on each
bond, under Sec. 325.12, an agent will not be required in the case of any bond paid by it to complete
the certification form at the end of the request for payment, nor determine the authenticity of any
certification which may appear on the bond at the time it is presented for payment: Provided, how­
ever, That each agent submitting paid bonds shall be understood by such submission to have repre­
sented and certified that the identity of the owner requesting payment has been duly established by
one of its officers or by an employee duly authorized by the agent.
Sec. 325.12. Determination of redemption values and payment of bonds.— The redemption value
of a bond is determined according to the number of months that it has been outstanding. The Federal
— 3—

Reserve Bank of the District will furnish each agent monthly with a table of redemption values from
which it will be possible, after determining the month and year of issue of any bond, to establish
its current value. After establishing such value, payment thereof to the owner requesting payment
shall be made in cash. No objection will be made to an arrangement between the owner and the
agent under which the owner accepts in lieu of cash, a credit to his checking, savings or share
account with the agent, or a check or similar instrument payable to his order. Each agent shall place
in the upper left-hand portion on the face of each bond paid by it the word “ PAID,” the amount and
date of payment and the name, location and code number assigned to the agent by the Federal
Reserve Bank. Other data pertinent to the payment procedure of an agent may be included if
approved by the Federal Reserve Bank of the District. Each paying agent of savings bonds acting
also as a paying agent of Armed Forces Leave Bonds should use the same payment stamp for both
activities. The Federal Reserve Bank will furnish any additional rubber stamps necessary for this
purpose, or, in lieu thereof, will approve suitable stamps in the possession of or prepared by an agent.
The affixation of such data shall be construed, by and between the agent and the Treasury Depart­
ment to be a certification by the paying agent that the bond has been paid in accordance with the
terms and requirements of this circular and the Armed Forces Leave Act of 1946, as amended, and
regulations issued pursuant thereto, and that payment of the proceeds of the bond has been made
to the owner.
Sec. 325.13. Forwarding paid bonds to the Federal Reserve Bank.—After payment, the bonds
shall be forwarded to the Federal Reserve Bank of the District in accordance with instructions issued
by such Federal Reserve Bank.
Sec. 325.14. Redemption of paid bonds by Federal Reserve Banks.—Upon receipt of the paid
bonds the Federal Reserve Bank will make immediate settlement with the paying agent for the total
amount of payments made on such bonds; however, such settlement shall be subject to adjustment
if any discrepancies are discovered at a later date.
Sec. 325.15. Losses resulting from payments.— The amendment to the Armed Forces Leave Act
of 1946, Public No. 254, Enacted July 26, 1947, provides in Sec. 4 thereof that the provisions of sub­
section (i) of Section 22 of the Second Liberty Bond Act, as amended, shall apply with equal force
to payments of Armed Forces Leave Bonds. The said subsection provides:
“ (i) Any losses resulting from payments made in connection with the redemption of savings
bonds shall be replaced out of the fund established by the Government Losses in Shipment
Act, as amended, under such regulations2 as may be prescribed by the Secretary of the
Treasury. The Treasurer of the United States, any Federal Reserve Bank, or any qualified
paying agent authorized or permitted to make payments in connection with the redemption
of such bonds, shall be relieved from liability to the United States for such losses, upon
a determination by the Secretary of the Treasury that such losses resulted from no fault
or negligence on the part of the Treasurer, the Federal Reserve Bank, or the qualified
paying agent. * * * The provisions of Section 3 of the Government Losses in Shipment Act,
as amended,3 with respect to the finality of decisions by the Secretary of the Treasury
shall apply to the determinations made pursuant to this subsection. * * *”
(a) Consideration of facts concerning loss.— In any case in which a loss occurs, the paying agent
shall be afforded ample opportunity to present all of the facts pertaining to the circumstances of the
payment for consideration by the Secretary.
Sec. 325.16. Preservation of rights.— Nothing contained in these regulations shall be construed
to limit or restrict any existing rights which holders of bonds may have acquired under the Armed
Forces Leave Act or the regulations prescribed thereunder.
Sec. 325.17. Redemption of bonds not payable by agents.— Any bonds which an agent is not
authorized to pay pursuant to the provisions of this circular should be forwarded by the owner, or
his agent, after certification of the requests for payment, to the Federal Reserve Bank or Branch
of the District for redemption except that in the case of bonds marked “ Duplicate” the bonds should
be sent to the Treasury Department, Division of Loans and Currency, Washington 25, D. C. If an
agent should undertake to forward such unpaid bonds at the request and in behalf of the person
entitled to payment, such bonds must be sent separate and apart from bonds which the agent has
paid.
R egulations governing replacement of losses resulting from payments made in connection with the redemption
of Armed Forces Leave Bonds are set forth in Treasury Department Circular No. 751, Second Revision.
3
The provisions of Section 3 o f the Government Losses in Shipment Act, as amended, with respect to the finality
of decisions by the Secretary of the Treasury are— “ Notwithstanding any provision of law to the contrary, the
decision of the Secretary o f the Treasury that such loss, destruction, or damage has occurred or that such ship­
ment was made substantially in accordance with such regulations shall be final and conclusive and shall not be
subject to review by any other officer of the United States.”

— 4—

Sec. 325.18. Functions of Federal Reserve Banks.— The Federal Reserve Banks, as Fiscal Agents
of the United States, are authorized to perform such duties, and prepare and issue such forms and
instructions, as may be necessary to the fulfillment of the purpose and requirements of this circular.
The Federal Reserve Banks, when authorized by the Treasury Department, may utilize any or all of
their Branches in the performance of these duties.
Sec. 325.19. Supplements, Amendments, etc.— The Secretary of the Treasury may at any time
or from time to time revise, supplement, amend, or withdraw, in whole or in part, the provisions
of this circular, or any revisions, supplements or amendments thereto, information as to which will
be furnished promptly to the Federal Reserve Banks and to the agents qualified hereunder.
Compliance with the notice, public rule making procedure and effective date requirements of the
Administrative Procedure Act (Pub. Law 404, 79th Cong.; 60 Stat. 237) with respect to this circular
is found to be contrary to the public interest because Armed Forces Leave Bonds are redeemable at
any time after September 1, 1947, at the option of the owners, and a substantial amount of time is
essential in order to establish the procedure necessary for the payment of the bonds after the date
set by the Congress.
The regulations set forth in this circular will become effective immediately, the requirements of
Sec. 4 (c) of the Administrative Procedure Act being dispensed with to facilitate the redemption
of Armed Forces Leave Bonds by the owners thereof after September 1, 1947, in accordance with
Public Law 254, 80th Congress.
A. L. M. WIGGINS,
Acting Secretary of the Treasury.

TABLE OF CONTENTS FOR M E M O R A N D U M O F IN S T R U C T IO N S A N D
EXPLAN ATION ISSUED IN CONJUNCTION W ITH TREASURY
DEPARTM ENT CIRCULAR NO. 811
TOPICS
Paragraph
Numbers

I.
II.
III.
IV.
V.
VI.

VII.
VIII.

IX.

X.
XI.

XII.
XIII.

QUALIFYING TO PAY BONDS________________________________________________
ANNOUNCEMENTS REGARDING AUTHORITY TO PAY BONDS...... ........ ..... -__
GENERAL POLICY CONCERNING PAYMENT OF BONDS_____________________
GENERAL DESCRIPTION OF BOND AND INFORMATION DESCRIBED
THEREON _________________________________________
PAYMENTS AUTHORIZED
General Authority _________________________________________________________
SPECIFIC LIMITATIONS ON PAYMENT AUTHORITY AND EXECUTION OF
REQUESTS
Limitation on payments due to improper identification_______________________
General requirements ____ ___________________________ ___ __________________
Separation documents of Army, Navy, Marines and Coast Guard acceptable, of
themselves, for establishing identity.__________________________________
Separation documents of Army, Navy, Marines and Coast Guard not acceptable,
of themselves, for establishing identity.__________________________________
Personal identification __
Depositors___________________________________________________
Limitation on payments due to improperly completed requests for payment......
Form of signature— general___ ______________________________________________
Signature by mark__________________________
Other forms o f signature_______________________________________________
Limitation on payments due to materia] irregularities (except mutilation or
defacement) _________________________
General ____________________________________________________________________
Exceptions to limitation on payments due to material irregularities__________
Limitations on payments due to mutilation or defacement of bonds____________
Limitations on payments due to “ duplicate” bonds____________
Limitations on payments due to death, incompetency, etc--------------------------------Limitations on payments due to requests for partial redemption of bonds______
DETERMINATION OF REDEMPTION VALUES AND PAYMENT OF BONDS
Determination of redemption values__________ ________________ ____________
Payment of redemption value______________________ _____________ ___________
RECORDING PAYMENT DATA ON PAID BONDS
General ____
Payment Stam ps___________________________________________________________
Use of payment stamps______________________
Recording amount of payment_______________________________________________
Recording date, transaction and the name and location of agent________
FORWARDING BONDS TO FEDERAL RESERVE BANKS
Preparation _______________
Transmittal lists ____________________________ ____________ _____ _____________
Recording description of paid bonds______________________ __ ________________
Frequency of making shipments...____ _______________________________________
Manner of shipment and insurance__________ _______ ___ _____________________
Records and report of shipments_____________________ __ ____________________
SETTLEMENT FOR PAID BONDS____________________ _________ ________________
ADJUSTMENT OF BONDS ERRONEOUSLY PAID
Error in amount of payment____________________________
Material irregularity discovered by Federal Reserve Bank____________________
Errors or irregularities discovered by the Department_______________________
REIMBURSEMENT FOR SERVICES IN PAYING BONDS___________________ _
MISCELLANEOUS
Destruction of records________________________________________________
Inquiries ________________
— 6—

2- 3
4- 6
7
8
9
10
10 (a)
10 (b)
10 (c)
10 (d)
10 (e)
11
12
13
14
15
15 (a)
15 (b)
16
17
18
19
20
21
22
23
24
24 (a)
24 (b)
25
25 (a)
25 (b)
26
27
28
29
30
31
32
33-34
25
36

Important; This memorandum is only for use of banks and other financial institutions eligible to
qualify as paying agents of Armed Forces Leave Bonds. It is not for general distribution.

MEMORANDUM OF IN S T R U C T IO N S A N D E X P L A N A T I O N ISSUED IN
CONJUNCTION W ITH DEPARTM ENT CIRCULAR NO. 811, PRESCRIBING
REGULATIONS GOVERNING PAYM ENTS B Y BANKS AND OTHER
F IN A N C IA L IN S T IT U T IO N S IN C O N N E C T IO N W ITH THE
REDEMPTION OF ARMED FORCES LE AV E BONDS.
TREASURY DEPARTMENT
Office of the Secretary

Fiscal Service
Bureau of the Public Debt

Washington, August 1, 1947

1.
This memorandum is presented for the guidance of agents which may qualify to make
payments of Armed Forces Leave Bonds under the provisions of Treasury Department Circular
No. 811. Its purpose is to explain in detail some of the provisions of the circular, and to clarify
the transactions authorized thereunder. Other instructions may be issued from time to time either
direct by the Treasury Department or by the Federal Reserve Banks, as Fiscal Agents of the United
States, which will be made available to each qualified paying agent. The terms “ Federal Reserve
Bank(s),” “ bond(s),” “ owner(s),” “ paying agent(s)” and “ agent(s)” whenever used herein unless
otherwise indicated specifically, or by context, shall have the same meaning as set forth in Sec.
325.4 of Circular No. 811.
I. QUALIFYING TO PAY BONDS
2. Sec. 325.1 of the circular outlines the different classes of incorporated financial institutions
which are eligible to be qualified to make payments of bonds and the conditions precedent to quali­
fication. In explanation of the condition under 325.1 (e ), the Treasury Department will require each
of the otherwise eligible financial institutions to be open during regular hours on each of the busi­
ness days observed in the community. Where the five day week is observed and the institution is
open during regular hours each of these days, the condition will be considered to have been com­
plied with. Under Sec. 325.2 any qualified paying agent of savings bonds is authorized to act as a
paying agent for Armed Forces Leave Bonds without filing a new Application-Agreement. The
Treasury will construe the payment of an Armed Forces Leave Bond as evidence of the institu­
tion’s desire to be a paying agent of such bonds and the act of payment will automatically qualify
the institution as such an agent. Any other eligible institution not qualified as a paying agent of
savings bonds that desires to qualify to pay Armed Forces Leave Bonds shall file an ApplicationAgreement Form PD 2125, with the Federal Reserve Bank of the District in which it is located or
to which it is assigned. Upon request of any institution copies of the Application-Agreement form
will be furnished by the Federal Reserve Bank of the District. Each such eligible institution pre­
senting Form PD 2125 for the purpose of qualifying to pay bonds, should, after the adoption of an
appropriate resolution by its governing board or committee, have a duly authorized officer (a) com­
plete and execute the Application-Agreement form on behalf of the institution (under its corporate
seal if it has one), (b) have the form acknowledged before a notary public (who should affix his
seal and indicate the date his commission expires), and (c) forward it to the Federal Reserve Bank
of its District.
3. The appropriate Federal Reserve Bank will consider each application filed and advise the
applicant whether or not its application is approved. The qualification of an institution automatically
qualifies any of its branches (including facilities of banks as defined in the circular) to pay the bonds,
if the branches are located within the United States (including its territories and insular possessions
and the Canal Zone) or the Republic of the Philippines. The Treasury Department will interpose
no objection to the payment of Armed Forces Leave Bonds by those subagents that were established
at June 30, 1945, for the payment of savings bonds and which have continued in that capacity since
that time. This exception shall not be construed to permit the establishment of additional new
subagents either directly or indirectly. The provisions of the Revised Memorandum o f Instructions
issued in conjunction with Department Circular No. 750, Revised, concerning the authority and
limitations of subagents in their savings bond payment activities shall be considered to be applicable
with equal force and effect in any Armed Forces Leave Bond activities of such subagents.
II. ANNOUNCEMENTS REGARDING AUTHORITY TO PAY BONDS
4. Any institution qualified as a paying agent for savings bonds which intends to become
a paying agent for Armed Forces Leave Bonds may announce that fact prior to September 1, 1947,

— 7—

if it so desires. Such announcements, whether prior or subsequent to September 1, should be con­
servatively made and presented and must not urge or promote the cashing of the bonds.
5. A suggested form of announcement is set forth below. It may be made in newspapers,
magazines or other publications, by radio, or by a circular notice or envelope stuffer at such times
and in such manner as may be deemed appropriate. No such notice or stuffer should be included in
any mailing relating to the purchase or sale of goods or services. The title of the announcement
should not be printed in type larger than 12 point and the text of the announcement should not be
printed in type larger than 10 point.
“ ANNOUNCEMENT TO OWNERS OF ARMED FORCES LEAVE BONDS”
“ The (name of institution) is authorized by the United States Treasury Department to cash
Armed Forces Leave Bonds for registered owners * (any time after September 1, 1947).
“ There is no requirement that these bonds be cashed at this time in order to get your money.
They can be cashed any time in the future, upon demand and without delay.
“ Unless you are in real need of the money now this institution and the United States Treasury
Department strongly recommend that you permit your bond to earn interest at 21/2 percent (up
to its maturity) until you actually need the cash. We will be glad to serve you any time.
“ To facilitate identification, owners should bring their original separation papers with them
when presenting bonds for payment.
*“ Under no circumstances may registered owners cash their bonds before September 2, 1947.”
*This line should be run on all advertising prior to September 2, 1947.
6. A qualified paying agent may print as an adjunct to any of its regular advertisements, or
it may display in its lobby or window, any of the following:
“ AUTHORIZED AGENT FOR PAYMENT OF ARMED FORCES LEAVE BONDS”
“AUTHORIZED TO PAY ARMED FORCES LEAVE BONDS”
“ THIS BANK (or other appropriate description of the agent institution) IS AUTHOR­
IZED TO PAY ARMED FORCES LEAVE BONDS”
The agent’s name may be used with any of these statements. The use of these or any other
approved statements, in the newspapers or other form of printed matter should be in type not
larger than 10 point. A lobby or window display of any approved statement must be kept to a
conservative size. No objection will be made to the display of a sign of a conservative character
and size in the window or cage of the agent’s office at which the bonds are paid. The Treasury
suggests these signs should be not larger than 10 x 16 inches in size. They may read— “ Armed
Forces Leave Bonds paid here.” Any of the above approved statements or signs may be combined
with similarly approved statements and signs relating to the payment of savings bonds.
III.

GENERAL POLICY CONCERNING PAYMENT OF BONDS

7. Particular attention is directed to the provisions of Sec. 325.7 of the circular, because it
is of the utmost importance that payment of the correct redemption value of the bonds be made
to and received by only the registered owners. Paying agents have both an opportunity and a
responsibility to render a valuable public service by paying bonds only under circumstances which
will accomplish this objective. Paying agents must not (1) advance money or make loans on, or
discount the redemption value of the bonds, either directly or indirectly, nor (2) pay any bond
before September 2, 1947. VIOLATION OF THESE REQUIREMENTS IN ANY RESPECT WILL
BE CAUSE FOR IMMEDIATE DISQUALIFICATION OF A PAYING AGENT.
IV.

GENERAL DESCRIPTION OF BOND AND INFORMATION INSCRIBED THEREON

8. The bonds are a distinctively designed punch card of check size with a blue tint background,
bearing the portrait of former Secretary of the Treasury Carter Glass. On the face of each bond
will appear:
(a) The denomination of the bond (appears in the center of the bond about one inch below
top edge) which is recorded in the allotted space as *125*dollars
$*125* (each
amount is to be preceded and followed by at least one asterisk)
(b) the name, service serial number, and in some cases the address of the owner (this appears
immediately below the denomination)
(c) the issue date, consisting of the month and year (appears on the right side o f bond
beneath the printed words “ Issue Date the first day of
” ) and in each instance it
—

8

—

must be either January, April, July or October. The earliest possible issue date on any
bond is April 1, 1943 and the last possible issue date is October 1, 1946. The bonds mature
five years from the issue date.
For the information of paying agents it should be stated that in a very few instances as a result
of reenlistments and adjustment of errors some persons received more than one bond and some
$25 denomination bonds were issued.
Y.

PAYMENTS AUTHORIZED

9. General Authority.— Sec. 325.8 provides in general that a qualified paying agent may pay
a bond only upon the request o f the individual whose name actually is inscribed on the bond as the
owner: Provided, That the agent is completely satisfied that the bond is in order for payment, that
the owner requesting payment is competent to act and that he is known to or has been identified
to the complete satisfaction of the agent. Supplemental explanations, instructions and exceptions
regarding these general statements are set forth hereinafter. Under this section an agent may pay
a bond for an owner where her name as inscribed on a bond has been changed by marriage. The
agent must be satisfied that the owner and the person requesting payment are one and the same
before it makes payment. Further, the woman whose name as inscribed on the bond as owner has
been changed by marriage should sign the request for payment in the form— “ (Miss) Mary T.
Jones, now by marriage Mrs. Mary J. Smith.” AGENTS ARE NOT AUTHORIZED TO PAY
BONDS FOR PERSONS WHOSE NAMES AS INSCRIBED ON THE BONDS HAVE BEEN
CHANGED IN ANY OTHER MANNER THAN BY MARRIAGE.
VI.

SPECIFIC LIMITATIONS ON PAYMENT AUTHORITY AND EXECUTION OF REQUESTS
10. Limitation on payments due to improper identification.—

(a) General.— Sec. 325.9 (b) provides that before a qualified paying agent makes payment
of a bond it must know or identify to its complete satisfaction the person requesting payment as
the owner of the bond (including the identification of a person whose name is changed by marriage).
If the agent does not know the person requesting payment as the owner, identification must be
made by the agent in a manner which will give assurance that the proceeds are received by the
owner of the bond. The Treasury will not prescribe the requirements an agent should follow in
accomplishing this objective. Generally, paying agents should require persons submitting Armed
Forces Leave Bonds for redemption to present their original separation or discharge papers; in
exceptional cases, where the original papers are not available, paying agents will be expected to
exercise extra care and diligence to insure that the person presenting the bond is in fact the owner.
Paying agents are urged to adopt as part of their payment procedure the recording on each bond
(preferably the back) of a brief but sufficient description of the manner in which identity of
persons is established, including serial numbers or other pertinent data. In any event it should
be understood that under the law the bonds are not transferable and agents are authorized to pay
them only to the owner named thereon. Agents must not make any payments if they in any way
effect or assist in effecting the sale, discount, transfer, or hypothecation of a bond after its issue.
(b) Separation documents o f Army, Navy, Marine Corps and Coast Guard acceptable, of
themselves, for establishing identity.— The majority of the enlisted personnel separated from the
different services after January 1943, were issued either a single separation document or two
documents in combination, which set forth a physical description and witnessed signature of the
recipient. In the absence of circumstances requiring additional evidence these documents should
be acceptable of themselves for establishing a person’s identity. Although photostatic copies of
these documents will be considered to be acceptable for identification purposes, paying agents are
urged to have the former members of the services present the originals of such documents, if
practical, at the time such members request payment of their bonds. In any event such document
or documents should be examined and it should be ascertained that (1) the service serial number
compares with that on the bond, (2) the physical description fits the person presenting the bond
for payment, and (3) the signature is reasonably similar to the signature placed on the bond by
such person (paying agents are cautioned to be certain that the printed form itself provides for
the recipient to sign such document before accepting any signature thereon as having been written
in the presence of a witnessing officer). In addition, close observation should be made to detect
any possible alterations. If such documents are presented and duly verified as above and their
form numbers and date and place of issue are recorded on the bond (preferably on the back), then
in the absence o f any unfavorable facts or circumstances being developed as a result of the
Department’s investigation of an erroneous payment, the paying agent will be considered as having
established that any loss which may occur from such payment resulted from no fault or negligence
on its part. Under the statute, o f course, absence of fault or negligence must be established in
order to permit the Secretary to relieve the paying agent of liability to the United States for a loss.
— 9—

(c) Separation documents of Army, Navy, Marine Corps, and Coast Guard not acceptable,
of themselves, for establishing identity.— There are some original separation documents (issued
principally in connection with officers) which do not contain a physical description or signature
or may contain only one of these items. In other instances the original documents have been lost
and the owner may have only a certificate issued in lieu of the original. Such certificates do not
contain witnessed signatures. If any of the documents referred to in this subparagraph are
accepted by a paying agent they should be supported by suitable supplementary identification of
a dependable nature. The Department as indicated in paragraph 10 (a) will not prescribe the types
of supplementary documents or evidence which may be considered acceptable identification.
Nevertheless it will be understood that documents which are easily obtained by anyone without
having to establish his identity, such as social security cards, are not, of themselves, considered
acceptable. The recording of notations on the bonds, or otherwise, of accepted documents or
evidence is recommended for the reason stated above in 10(b) as well as for the purpose of
apprehending forgers.
(d) Personal identification.— Personal identification, that is, identification of a stranger by a
customer of or by someone well and favorably known to the paying agent if judiciously used is one of
the best methods of identification and has the approval of the Treasury. But, of course, personal
identification will not be considered good identification by the Treasury Department when a paying
agent accepts the mere statement of the identifier that he knows the person presenting the bond
for payment by the name inscribed on the bond. The personal integrity and reliability of the identifier
are not sufficient. It is the reliablility of the source and duration of the identifier’s knowledge of the
person presenting the bond for payment that are important. The paying agent, therefore, should
inquire as to the source and the duration of the identifier’s knowledge of the person presenting the
bond and should be satisfied that they are sound.
(e) Depositors.— The Department will not object to an agent accepting bonds for payment by
mail or otherwise from its depositors: Provided, that (i) the agent has good reason to believe that
the depositor did not establish the account for the purpose of cashing these or other instruments
belonging to another person, (ii) each depositor is also the owner requesting payment, (iii) the agent
is completely satisfied that the signature to each request for payment is that of the “ owner deposi­
tor,” and (iv) the agent is satisfied that the owner desires the bond proceeds to be credited in his
checking, savings or share account unless, of course, payment is made in cash, or by check or similar
instrument drawn to the order of the owner.
11. Limitation on payments due to improperly completed requests for payment.— Sec. 325.9 (c)
provides that a bond may not be paid if the owner does not sign the request for payment (form for
which appears on the back of each bond) in the prescribed manner (see following paragraphs). An
agent should require completion of the request for payment only after it is satisfied that the bond is
in order for payment. If the form for requesting payment is completed before the bond is presented
to the agent, the agent should have the owner again sign the request (after being satisfied the bond
is in order for payment), immediately above or below the first signature (except, of course, as per­
mitted under 10(e) hereof) for purposes of comparison to an authentic signature on an acceptable
type of identification document. In those unusual instances where it is not practicable to so place the
second signature, substantially the same wording in the REQUEST FOR PAYMENT may be typed
or imprinted on any other available place on the back of the bond. The request then may be completed
and signed by the owner in the prescribed manner.
12. Form o f signature and address— general.—The request for payment should be completed
and signed in ink (although the practice is not encouraged, indelible pencil may be accepted) to show
(a) the full name (as inscribed on the bond) of the owner requesting payment and (b) his home or
business address. Agents are authorized to pay bonds only if the signature of the owner is exactly
as the name is inscribed on the bond. However, the Treasury Department is aware that slight errors
and variations in the correct spelling of names of owners have been made inadvertently in inscribing
bonds and that they have been undetected by the owner or, perhaps, considered by him to be of an
insignificant nature. Although an agent is not required to pay bonds erroneously or improperly
inscribed, it may wish to pay such bonds in some cases because of its knowledge of the facts or its
reliance upon the integrity of the owner. Accordingly, if an agent is fully satisfied that the owner
named on the bond and the person requesting payment are one and the same, no objection will be
made to effecting payment of such bonds. In such cases, however, the request for payment should
show the name of the owner as inscribed on the bond followed by the correct signature. Each of these
cases will require careful and individual consideration; therefore, the Treasury Department must
place upon the paying agent the responsibility for any such payment. The Department considers the
current address to be of importance to it and the paying agent in the event of later discovery that
a bond was improperly cashed, and therefore requires the owner to show his current home or business
address on the back of the bond presented for payment. Where the address has been recorded on the
face of the bond and the owner is still at the same address no objection will be made to the owner
— 10 —

or the paying agent showing the word “ same” (or a similar notation) in the appropriate space on
the back of the bond. It is the duty, of course, of the owner presenting the bond to record the address
information on the bond.
13. Signature by mark.—If an owner signs his name to the request for payment by mark, the
signature should be in the form— "John J. Jones (x) his mark” and must be witnessed by at least
one person in addition to the agent’s employee paying the bond. The witness should attest substan­
tially in the form— “Witness to the signature by mark” and sign his name and show his address
immediately thereafter, on the back of the bond.
14. Other forms of signature.— See paragraph 9 hereof for form of signature to be used by an
owner whose name has been changed by marriage.
15. Limitation on payments due to material irregularities (except mutilation or defacement).—
(a) General.— Sec. 325.9 (d) provides that an altered, illegible, incomplete (in whole or in part)
or unauthorized inscription, issue date, denominational amount or service serial number shall be con­
sidered a material irregularity which will render a bond ineligible for payment by a paying agent.
(b) Exceptions to limitation on payments due to material irregularities.— It may be that bonds
will be presented to agents for payment bearing material irregularities in the inscription, denomi­
national amount, issue date or service serial number. In no case, of course, can the current redemp­
tion value of a bond be readily established if the issue date or denominational value is indistinct or
incomplete. Therefore, under no circumstances should a bond be paid by an agent if the issue month,
the issue year or denominational value is not clear or has not been recorded on the bond. However,
in other instances even though an agent is not authorized to pay bonds bearing irregularities, it may
wish to pay such bonds in some cases because of its knowledge of the facts or its reliance upon the
integrity of the owner. (See also, paragraph 12 hereof.) Accordingly, if the agent is fully satisfied
that no fraud is involved in any apparent irregularities, no objection will be made to payment of such
a bond by the agent. Each of these cases will require careful and individual consideration; therefore,
the Department must place upon the paying agent the responsibility for any such payment.
16. Limitations on payments due to mutilation or defacement of bonds.— Sec. 325.9 (d) provides
that if a bond or any essential part thereof appears to be altered or is mutilated or defaced in a man­
ner creating doubt or arousing suspicion with respect to the authenticity or validity of the bond,
it must not be paid by a paying agent. Where suspicions are aroused, it would be helpful, if practi­
cable, for the agent to give a receipt for the bond and to obtain as much information as possible con­
cerning the person presenting it. The bond and information should be forwarded promptly to the
Federal Reserve Bank, which will take appropriate action in the matter.
17. Limitations on payments due to “ duplicate” bonds.— In explanation of Sec. 325.9 (e) it may
be stated that a substitute Armed Forces Leave Bond marked “ DUPLICATE” is issued by the
Department in a case where a validly issued bond has been determined by the Secretary of the Treas­
ury to have been lost, stolen or destroyed or to have been mutilated so as to require replacement. In
some instances the bond claimed to have been lost, stolen or destroyed will have been redeemed at
the time the bond marked “ DUPLICATE” is presented for payment. In order to determine the facts
of the case and prevent a possible loss to the United States, the Department requires that all bonds
marked “ DUPLICATE” be cleared with it before payment. For that reason a paying agent is not
authorized under any circumstances to pay any bond marked “ DUPLICATE.”
18. Limitations on payments due to death, incompetency, etc.—As indicated in Sec. 325.9 (f)
paying agents are not to pay bonds where owners are deceased, incompetent or under legal guardian­
ship. As evidence must be obtained and examined before payment is made in these cases, paying
agents should refer the cases to the Federal Reserve Bank or the Treasury Department, Division of
Loans and Currency, Washington 25, D. C.
19. Limitations on payments due to requests for partial redemption of bonds.— In explanation of
Sec. 325.9 (g), it may be stated that Treasury Department regulations do not permit any denomina­
tional exchanges, consequently no partial payment and reissue of the remainder will be permitted
VII. DETERMINATION OF REDEMPTION VALUES AND PAYMENT OF BONDS
20. Determination of redemption values.—As stated in Sec. 325.12, the redemption value of a
bond is determined from the denomination and the period of months the bond is outstanding. For
the convenience of paying agents a special table of redemption values will be furnished monthly by
the Federal Reserve Banks. The tables will show the current amount due for all denominations from
?25 to $1,000 inclusive. The amount currently due on any bond of any denomination listed may be
read directly from these tables. For bonds of denominations in excess of those listed the agent should
add the correct value for the denominations needed to equal the denomination of the bond presented.
— 11 —

For example, the value of a bond o f $1,500 denomination would be computed by adding together the
current redemption value of the $500 and $1,000 bonds. In explanation it may be stated that to date
only about 17,000 bonds of denominations higher than $1,000 have been issued. The Federal Reserve
Banks will advise agents of the date the tables should be expected each month and if they are not
received by that time, the Federal Reserve Bank should be notified immediately. EXTREME CARE
SHOULD BE TAKEN TO USE ONLY THE TABLE ESPECIALLY PREPARED FOR THE MONTH
DURING WHICH PAYMENTS ARE BEING MADE.
21. Payment of redemption value.— As further stated in Sec. 325.12, the current redemption
value of a bond shall be paid by the agent in cash. However, no objection will be made to any arrange­
ment mutually agreeable to the owner requesting payment and the agent making payment whereby
the owner accepts, in lieu of cash, a credit to his checking, savings or share account with the agent,
or a check or similar instrument payable to his order.
VIII. RECORDING PAYMENT DATA ON PAID BONDS
22. General.— In order to facilitate handling of and accounting and settlement for paid bonds
as well as to safeguard against payment of the bonds a second time, it is important for all concerned
that paid bonds be handled by paying agents in a manner which will accomplish these objectives at
the time payment is made. With this in mind the Treasury Department has prescribed a hand stamp
setting forth certain data to record the payment, for use by tellers or other employees of qualified
paying agents. Qualified paying agents o f United States savings bonds will use the same payment
stamp furnished to them by the Federal Reserve Bank for stamping savings bonds. It is extremely
important to the economical processing of the bonds by the Treasury that the bonds not be spindled,
folded, pinned, or clipped together or otherwise bent, torn or mutilated. Accordingly the full coopera­
tion of paying agents in processing and mailing the bonds in avoiding such mutilation will be sincerely
appreciated.
23. Payment stamps.— Financial institutions not now qualified as paying agents of savings
bonds will be furnished hand stamps (hereinafter referred to as “ payment stamp (s) ” or “ stamp(s) ” ),
by the Federal Reserve Bank of the District. Each such bank or other financial institution seeking
qualification should advise the Federal Reserve Bank as soon as possible of the data it desires recorded
on the stamps it may use and the initial number of stamps to be required. Paying agents of savings
bonds will use the payment stamps provided in connection therewith. When payment stamps are
requested the number should be kept to a minimum consistent with practical necessity. In the interest
of uniformity it is preferable that only the Federal Reserve Banks shall obtain the payment stamps.
The data ordinarily to be included in the payment stamp will be as follows:
PAID $ ........

...................

D 366
THE XYZ N A TIO N A L BANK
68-7 &

SEPT. 20, 1947
BLANK, TEXAS

By....................................10

F or recording amount paid
.Name and location o f agent and such code number as may be assigned by
Federal Reserve Bank
T o show actual date o f payment
An agent may elect, either to (1) show a code number or symbol representing
the person making payment, (2) provide space fo r the written initial or
signature o f such person, or (3) both.

In order to minimize the possibility of subsequent alteration and to effect a distinct and permanent
record on microfilm, the Department urges the use of a black or dark blue penetrating ink in imprint­
ing the payment stamp and recording other data required thereby. Other colors of penetrating inks
dark enough to microfilm satisfactorily may be used. However, it will be appreciated if agents can
arrange eventually to use only the black or dark blue colors. In any event, extreme care should be
taken not to smear or blur the data recorded on the bonds.
24. Use of payment stamps.—

(a)
Recording amount o f payment.— AN IMPORTANT CHANGE COMPARED TO S
INGS BOND PROCEDURE IS SET FORTH IN THIS PARAGRAPH. As with savings bonds, Armed
Forces Leave Bonds should have the payment stamp imprinted thereon as soon as they are paid. Also
as in the case of savings bonds the payment stamp should be imprinted on the face of the bond.
HOWEVER, THE IMPRINT SHOULD BE RECORDED IN THE UPPER LEFT HAND CORNER
OF THE BONDS IN A MANNER WHICH WILL PERMIT RECORDING THE AMOUNT PAID
IMMEDIATELY ABOVE THE PORTRAIT AND UNDER THE BORDER EMBELLISHMENTS.
(See appended exhibit No. 1, showing an outline of a bond with a specimen stamp appearing in proper
position.) Although the Department regrets the necessity for this variation from the savings bond
procedure for recording the payment data, it will be appreciated if paying agents will give special
attention thereto. Full compliance will allow the Treasury to realize the maximum economy possible
in functioning the bonds through the mechanical processes possible with this punched card bond.
— 12 —

Immediately after stamping the bond the amount of the bond payment should be written in such
space on the face of the bond by use of a black or dark blue ink or other colored ink dark enough to
microfilm satisfactorily. Although indelible pencil or a dark colored crayon will be accepted, the use
thereof is not encouraged. In any recording made on the face of a bond by an agent, extreme care
should be exercised to prevent defacing the bond’s serial number, the name, service serial number
and address, if any, o f the owner, or the issue date.
(b) Recording date, transaction and the name and location of agent.— As provided in Sec.
325.12, each bond shall show in addition to the amount of payment (a) the date of the payment
(month, day and year), (b) the name, location and code number assigned to the paying agent by
the Federal Reserve Bank, and (c) the word “ Paid” . All of this data will be provided in the agent’s
payment stamp. Particular care should be taken to insure recording the correct date of payment of
each bond. A number or other symbol may be included to indicate the person in the institution quali­
fied as the paying agent who is responsible for the bond payment, and provision may be made for
his signature or initials.
IX. FORWARDING BONDS TO FEDERAL RESERVE BANKS
25.
Preparation.— Sec. 325.13 provides that paying agents shall submit paid bonds to Federal
Reserve Banks under instructions of such Banks. These instructions will not require any special
sorting of bonds prior to shipment, except that bonds paid in one month must be segregated from
bonds paid in another month, and Armed Forces Leave Bonds must not be intermingled with savings
bonds. The latter requirement does not prohibit the dispatch of Armed Forces Leave Bonds and
savings bonds in the same envelope or wrapper but care should be taken to maintain the segregation
required, including separate transmittal letters, and to adequately protect the Armed Forces Leave
Bonds against tearing, bending, or other mutilation.
(a) Transmittal lists.— Paying agents will be expected to prepare and forward to the Fed­
eral Reserve Bank with each group of paid bonds a list which will:
(1) Identify the agent.
(2) Show the month in which the bonds were paid.
(3) Show the date the bonds w>ere forwarded.
(4) Set forth, in the order in which the bonds are prepared for shipment, the amount paid on
each bond in the shipment. Where the method used by the agent for recording bond serial
numbers permits, no objection will be made to the agent grouping all bonds bearing the
same paid amount and listing them in the following manner—
10 @ $53.85_______ ____ ____________________$538.50
10 @ $54.16_______________________________ 541.60
Etc.
The bonds in this instance should be grouped according to the amount of payment stated
on the bonds.
(5) Set forth the total amount paid on all bonds in the shipment.
(6) Set forth opposite each amount listed the appropriate serial number of the bond, unless
a record of such information is maintained in some other form by the agent. In this
connection any qualified paying agent is authorized to microfilm the face or reverse side
of the bonds, or both, if it so desires. Such film records must be maintained as confidential.
The agent may project such film records upon a screen but no prints, enlargements, or
other reproductions thereof shall be made except with official permission which may be
secured through the Federal Reserve Bank.
(7) Show the actual total number of bonds submitted with each list. This is essential to the
maintenance of records and the simplification of the computation and reconcilement of
claims of paying agents for services rendered in the payment of bonds.
(8) Indicate the manner in which settlement and possible adjustments for the bonds should be
made by the Federal Reserve Bank.
The original of these lists, hereinafter referred to as “ transmittal letters,” must be included with
the bonds when they are forwarded to the Federal Reserve Bank. A copy of the transmittal letter
and a record of the bonds by serial number and amount paid must be retained by the paying agent.
For the benefit of the paying agent in presenting the facts in connection with any claim for relief
which may have to be presented on account of bonds lost, destroyed or damaged as a result of ship­
ment, it is suggested that the employee or employees who listed and prepared the bonds for shipment
and who dispatched them to the Federal Reserve Bank should initial the copy of the transmittal
letter retained by the agent.
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(b)
These paid bonds will be subject to the provisions of the Government Losses m
ment Act, as amended, while they are in shipment (see paragraph 27 hereof). It will be essential to
any claim that may be made by a paying agent for relief under the provisions of that Act, in the
event of the loss or destruction of or damage to the bonds during shipment, that the bonds be identi­
fied by serial numbers and amounts paid. It will be the responsibility o f the paying agent to produce
such information. If the Treasury Department is advised of the month of payment, and the serial
number and the amount paid on each bond in the shipment, the Department will be able to identify
the bonds included in the shipment and make settlement with the paying agent for the loss resulting
from shipment. Relief may not be granted otherwise. A paying agent may establish a record of the
bonds included in a shipment (i) by microfilm, (ii) by recording the bond serial numbers on its trans­
mittal letters directly opposite the respective bond redemption values set forth thereon, or (iii) it
may establish the necessary record in any other manner it deems desirable. If a paying agent doss
not maintain such record, it will be considered as prima facie evidence that it does not desire to
avail itself of the protection afforded under the Government Losses in Shipment Act.
26. Frequency of making shipments.— A paying agent may forward bonds to the Federal
Reserve Bank each business day, although where an agent pays only a small volume of bonds it will
be advantageous if daily shipments can be avoided. IN ANY EVENT ALL PAID BONDS ON
HAND ON THE LAST BUSINESS DAY OF A MONTH MUST BE FORWARDED TO THE FED­
ERAL RESERVE BANK NOT LATER THAN THE FOLLOWING BUSINESS DAY.
27. Manner of shipment and insurance.— The shipment of paid bonds to a Federal Reserve
Bank by a paying agent will be made at the risk of the United States. Accordingly, the shipments will
be subject to the provisions of the Government Losses in Shipment Act, as amended,1 and the regu­
lations2 prescribed pursuant thereto, except as may be modified hereunder. It is essential to obtain­
ing relief under the Act that there be a compliance with the prescribed regulations. Bonds paid
under the provisions of Treasury Department Circular No. 811 may be prepared for dispatch and
may be sent to the Federal Reserve Bank in the same or a substantially similar manner in which the
agent would handle and ship paid savings bonds or checks. Paid savings bonds and Armed Forces
Leave Bonds may be included in the same envelope or wrapper (see paragraph 25). Assuming that
(i) the basic record of shipment, as provided in paragraph 25 hereof, is maintained, (ii) the bonds
are properly stamped, as provided in paragraph 24 hereof, and (iii) due care is used in handling and
dispatching the paid bonds,, an agent should have no difficulty in establishing its claim for and
obtaining relief under the Act in the event a shipment is lost, destroyed or damaged. Pending estab­
lishment of such of these claims as may be presented by an agent, the Treasury will allow an
immediate temporary settlement with the agent on the basis of the amount stated in its transmittal
letter, if the agent submits the required description by bond serial numbers of each of the bonds
involved in the claim.
28. Records and reports of shipments.— A paying agent will not be required to mail or send
separate notices of each shipment made either to the Federal Reserve Bank of the District or to the
Treasury Department, nor will the agent have to make any accumulated report of shipments effected
under the Government Losses in Shipment Act. In the event it comes to the knowledge of an agent
that any shipment made by it has been lost, destroyed or damaged, or if it has been so alleged,
immediate notice thereof should be given to the Federal Reserve Bank. All provisions of Treasury
Department regulations relating to the handling and shipment of valuables under the Government
Losses in Shipment Act, as amended, which are inconsistent with the provisions of this memo­
randum are hereby modified with respect to the shipment of paid bonds by qualified paying agents.
X. SETTLEMENT FOR PAID BONDS
29. As provided in Sec. 325.14, immediate settlement will be made by Federal Reserve Banks
for the total amount of paid bonds submitted by a paying agent, subject to audit and verification.
Settlement will be made according to the request of the paying agent, by credit in its reserve account
if the agent is a bank which is a member of the Federal Reserve System, or in its clearing account
(if any) if the agent is a bank which is not a member of the System, or in the reserve or clearing
account of a correspondent of an agent, or settlement will be made by check issued by the Federal
Reserve Bank drawn on the Treasurer of the United States. Although Federal Reserve Banks will
examine paid bonds promptly, such examination and redemption of the bonds will not always be
possible on a daily basis. In each instance settlement will be subject to later adjustment for incor­
rect or improper payment of bonds.
XI. ADJUSTMENT OF BONDS ERRONEOUSLY PAID
30. Error in amount of payment.— In the event of over payment or under payment of the
proper redemption value due on a bond, the Federal Reserve Bank will make the necessary correction
A c t of July 8, 1947, C. 444, Sec. 1, 50 Stat. 479 as amended by the Act o f August 10, 1939, C. 665, Sec. 1, 52
Stat. 1358; U.S.C., title 5, Sec. 134.
'
■Treasury Department Circulars Nos. 576 and 577.

14

on the bond and its records and will advise the paying agent o f the discrepancy, furnishing all the
details necessary for the agent to effect an adjustment with the owner. When a paying agent is
advised by the Federal Reserve Bank that an under payment has been made, the Treasury will
expect the paying agent to see that the owner receives the full amount of the under payment.
31. Material irregularity discovered by Federal Reserve Bank.— Bonds bearing material irregu­
larities of a nature which make it necessary to return them to the paying agent will be returned
promptly after discovery of the irregularity by the Federal Reserve Bank. In those cases where the
agent is not authorized to pay the returned bond the agent, upon effecting settlement with the per­
son presenting the bond, should cancel its payment stamp before releasing the bond to such owner.
Whenever necessary payment stamps should be canceled by writing or stamping in a dark colored
ink the word “ canceled” and the date of cancellation followed by the signature and title of an officer
of the paying agent. If a bond appears to have been materially altered or mutilated with intent to
defraud, the original bond will be retained by the Federal Reserve Bank for investigation of the case
and a photostatic copy of the bond forwarded to the agent. Thereafter, if and when the bond is
acceptable for redemption, the Federal Reserve Bank of the District will give instructions to the
agent with regard to disposition of the case. Adjustment for the amount of payment represented
by the bond, if any, will be made in the manner set forth in paragraph 30 hereof. In any event paying
agents are expected to respond promptly when so requested in connection with paid bonds presented
by them.
32. Errors or irregularities discovered by the Department.—Where an erroneous payment of
or an irregularity in a bond is discovered by or brought to the attention of the Treasury Department
after receipt by it of the bond, prompt notice will be given to the paying agent and the case will be
handled as the circumstances may require: Provided, however, that the agent which paid the bond
will not be required to make restitution in connection with such bond unless and until the Secretary
of the Treasury has determined that a final loss has occurred and he is unable to find that such loss
resulted from no fault or negligence, on the part of the agent.
XII. REIMBURSEMENT FOR SERVICES IN PAYING BONDS
33. Under the provisions of Sec. 325.5 of Circular No. 811, a qualified paying agent is entitled
to receive reimbursement for its services in paying the bonds. Forms will be supplied by the Federal
Reserve Banks for presenting claims for such reimbursement. Each agent desiring reimbursement
should present its claim promptly after the close of each calendar quarter (ending March, June
September, and December); Provided, however, that the first four months (September to December
1947, inclusive) will be treated as the first quarter for reimbursement purposes. Thereafter the usual
calendar quarter periods will be observed.
34. The form (which will be the same as that used in connection with reimbursement for
savings bond payments) will provide for stating the number of bonds paid and the amount of reim­
bursement claimed. In stating the number of bonds paid during a reimbursable period, there should
be taken into consideration the total number of bonds included on each of the agent’s transmittal
letters bearing a date of shipment within the period or received during the period, according to the
basis prescribed by the Federal Reserve Bank of the District. Beginning with January 1, 1948.
Armed Forces Leave Bonds and savings bonds will be combined for the computation of reimburse­
ment but for that purpose only. Each branch (including authorized, bank facilities) of a qualified
paying agent may be regarded as a separate entity in computing claims, provided separate trans­
mittal letters support bonds paid by each. Such bonds may be shipped directly to the Federal Reserve
Bank by the branch, or through the head office. In the event a Federal Reserve Bank returns an
improperly paid bond (or a photostatic copy thereof) to an agent, the tally for the current quarter
shall be reduced accordingly. If the bond may be corrected and resubmitted as new business the bond
will be counted, for the purpose of computing reimbursement, when it is resubmitted.
XIII. MISCELLANEOUS
35. Destruction of records.— Records accumulated in connection with the payment of Armed
Forces Leave Bonds may be disposed of in accordance with the Bank’s desires in the matter with
one exception. Any records pertaining to a claim made or to be made to the Treasury on account of
loss, theft or destruction of any paid bonds, should be retained until such claim is finally adjudicated
by the Department. It is presumed in this paragraph that transmittal letters for paid bonds sent to
a Federal Reserve Bank or other records pertaining thereto, would not be destroyed by a bank until
the bank was reasonably certain that the bonds and transmittal letters had been received by the
appropriate Federal Reserve Bank or Branch.
36. Any inquiry in connection with this memorandum or other inquiry with respect to this
subject should be communicated to the Federal Reserve Bank of the District in which the paying
agent is located.
A. L. M. WIGGINS,
Acting Secretary of the Treasury.
— 15 —

Form PD 2125
TREASU RY DEPARTMENT

EXH IBIT “ A ”

Fiscal Service
Bureau of the Public Debt

APPLICATION-AGREEMENT
Payments by banks and other financial institutions in connection with the redemption of
Armed Forces Leave Bonds
Dated_________________ -—----- --------------- >194------TO THE FEDERAL RESERVE BANK OF____________________________________
Fiscal Agent of the United States:
The
__... _________________________________ , hereinafter referred to as the undersigned,
(Name of Institution)

hereby applies for qualification to make payments in connection with the redemption of Armed
Forces Leave Bonds, as provided in Treasury Department Circular No. 811. The undersigned hereby
certifies that (a) it is incorporated under the laws o f_______________________________;----------------- ;
(b) in the usual course of business it accepts, subject to withdrawal, funds for deposit or the pur­
chase of shares; (c) it is under the supervision of the____________________________- -------------------(Name o f Supervising Dept, or Similar Office)

of

________________________________ ; (d) it maintains a regular office for the transaction of its
(State or Other Jurisdiction)

_

business at the address specified below; (e) it is open daily and observes regular business hours; and
(f) it has adequate authority under its charter to enter into this agreement.
In consideration of being qualified as a paying agent, the undersigned hereby agrees:
1. To be bound by and to comply with the provisions of Treasury Department Circular No. 811,
including all supplements and amendments thereof and instructions issued thereunder.
2. That the Secretary of the Treasury, or the Federal Reserve Bank o f------- .----------- ----- ------ ,
by written notice, may, at any time, and without previous demand or notice, terminate the
qualification of the undersigned; and that in the event of such termination the undersigned,
after receipt of such notice or after the date of termination specified therein, will not there­
after pay any Armed Forces Leave Bonds.
It is understood that the undersigned may withdraw from this Agreement at any time upon
written notice of such intention to the Federal Reserve Bank of_________________________ ______ _
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed under
seal by the officer below named, thereunto duly authorized by a resolution of its governing board
or committee adopted on the...... ........ day of____ ______ _____ ________________ , 194----(Name)
(Address)

(SEAL)

By_______________________ ______
(Signature o f Officer)
(Title of Officer)

ACKNOWLEDGMENT
State of
(
.
County of
f ss.
On this.._______ day o f_____________________ , 194____, before me appeared________ ________
___ _______________ , to me personally known, who, being by me duly sworn, did say that he
is the ------------------------------------of the_________________________________________________________
(Title of Officer)

(Name o f Institution)

and that the seal affixed to the above instrument is the corporate seal of said institution, and that
the above instrument was signed and sealed in behalf of said institution by authority of its govern­
ing board or committee, and said officer acknowledged said instrument to be the free act and deed
of said institution.
Notary Public

(SEAL)
My commission expires__________________________________
(In case the applicant has no corporate seal omit the words, “ and that the seal affixed to the
above instrument is the corporate seal of said institution,” and add at the end of the affidavit “ The
institution has no corporate seal.” )
— 16 —

EXH IBIT “B ”
Form PD 2126
TR EASURY DEPARTMENT

Fiscal Service
Bureau of the Public Debt

NOTICE OF QUALIFICATION OF A BANK OR OTHER FINANCIAL INSTITUTION TO MAKE
PAYMENTS IN CONNECTION WITH THE REDEMPTION OF ARMED FORCES
LEAVE BONDS
, 194__
To:..

Gentlemen:
Your Application-Agreement Form PD 2125, dated - ______ __________ ____ , has been approved
as of this date. You are hereby notified that you are qualified to make payments in connection with
the redemption of Armed Forces Leave Bonds pursuant to the provisions of Treasury Department
Circular No. 811, and any supplements or amendments thereof and instructions issued pursuant
thereto.
FEDERAL RESERVE BANK OF_____ ____ __
Fiscal Agent of the United States.
By

EXHIBIT NO.I
Outline of on Armed Forces Leave Bond
with a specimen payment stamp appearing in proper position

17 —

I NDEX

Paragraph
Numbers

ANNOUNCEMENTS OF AUTHORITY TO PAY BONDS
Approved announcements __________________________
Lobby and window display signs_____________________
Prior to September 2, 1947_____ :____________________
Prohibition against making_________________________
Publication o f ____________________________ _________
Radio
__________________________ _________________

5, 6
6

4
4
5 ,6
5

DESCRIPTION OF BONDS
Data inscribed by issuing agents_______________ _____
Denominations authorized for issuance______________
Design and type of bond ....._________________________
General _____ ________ ______ _____ __________________
Issue dates ________________________________________
Name o f owner inscribed___________________________
Service serial number on bonds..__________ __________

8
8, 8 (a)
8
8
- 8(c)
8 (b )
8(b)

.

DESTRUCTION OF RECORDS________________________

-

DISCOUNTING, HYPOTHECATION, ETC., OF BONDS

7 ,10(a)

35

PAYMENT OF BONDS
Accounting for paid bonds
_____________30, 31, 32
Adj ustments ________________________________
Loss in shipment:.. . __________ _______________
______ 25(a), 25(b), 27
Manner of settlement f o r ______________________
_________ 2 5 (a )(8), 29
Microfilming, other recording__________________
_________ 25(a), 25(b)
Preparation for dispatch______________________
_______________
25
2 5 (a )(6), 25(b), 27, 28
Records, reports of paid bonds and shipments___
Segregation from savings bonds_______________
_______________
25
__________2 5 (a )(8), 29
Settlement __________________________________
Shipment o f bonds, frequency of, etc___________
_______________
26
Shipment of bonds, manner of_________________
_______________
27
Sorting of bonds_______________________ ______
— __
25
Transmittal lists _____________________________
_______________ 25(a)
Address of owner, in request for payment__________
______________
12
Adjustments, erroneously paid bonds
Discovered by Treasury Department________________________ ___ _________________
32
Incorrect amounts _________________________
30
Material irregularity discovered by Federal Reserve Bank-------------------- ----------------3l
Cancellation of paid bonds later discovered to be ineligible for payment-----------------------31
Description of bonds___________________________________________

8

General __________________________________________

9

Identification
Acceptable documents for establishing identity__________ ______________________ _
Acceptable documents for establishing identity, not prescribed by Treasury..... 10(a),
Change of name, by marriage___________________________________________________
Depositors __________________________________________________
Documents
Alteration, check for_______________________________________________________
Check data on_____________________________________________________________
Record data relative to_________________________________________ 10(a), 10(b),
— 18 —

10(b)
10(c)
10(a)
10(e)
10(b)
10(b)
10(c)

Paragraph
Numbers

General _____________________ ______________________________________________ 7, 9,10 (a)
Notations on bonds relating to_______________________________________10(a), 10(b), 10(c)
Personal identifiers ___________________________________________________________ 10(d)
Separation papers, presentation of-_____________________________________ 10,10(a), 10(b)
Limitation on payments
Change of name (other than by marriage)_______________________________________
9
Death, incompetency, etc_______________
IS
Discounted, hypothecation, etc_________________
7
Duplicate bon d s________________________________________________________________
17
General _________________________________________________________________ ______ 10(a)
Identification, not completely satisfactory________________________________________ 9,10
Incompetency, death, etc_______________________________________________________
18
Mutilated, defaced, irregular bonds__________ __ _________________________________ 15,16
Partial payments ______________________________________________________________
19
Persons other than owners, presented by________________________________________ 9 ,10(a)
Prohibition on any payments prior to September 2, 1947_________________________
7
Requests for payment not properly completed________________ ____________________ 11,12
Value cannot be determined____________________________________________________
15
Losses resulting from
Action by Treasury concerning_________________________________________________
82
Mutilation of bonds, avoiding________________________________________________________ 22, 25
Payment stamps and ink to be used_________________________________________________ 23, 24
Recording data o f payment_____________________________ : ----------------------------------------24
Redemption values and tables_______________________________________________________
20
Redemption values, payment o f _____________________________________________________
21
Redemption values, recording on bond__________________________________ 24 (a ), Exhibit No. 1
Signature by mark_________________________________________________________________
13
Signature, change of name by marriage______________________________________________
9
Signatures, comparison o f _________________________________________ ________________ 10,11
Signatures, to requests for payment_________________________________________________ 11,12
Signatures, variations compared to spelling on face of bond-----------------------------------------12
QUALIFICATION TO PAY BONDS
By qualified agents for savings bonds________________________________________________
By other eligible financial institutions_______________________________________________
By branches of agents_______________________________________________________________
Subagents __________________________________________________________________________

2
2
8
3

REIMBURSEMENT FOR PAID BONDS
Claim for, may be filed--------------- --------------------------------------------------------------- ---- ----------33
Combine number o f paid savings and leave bonds after January 1, 1948_________________
34
Number paid bonds included------------------------------------------------------------------------ 25(a) (7), 33, 34
Periods for making reimbursement________________________________________________
34

— 19

REGULATIONS GOVERNING REPLACEMENT OUT OF THE FUND ESTABLISHED BY THE
GOVERNMENT LOSSES IN SHIPMENT ACT, AS AMENDED, OF ANY LOSSES RESULTING
FROM PAYMENTS MADE IN CONNECTION WITH THE REDEMPTION OF UNITED STATES
SAVINGS BONDS AND ARMED FORCES LEAVE BONDS
1947
Department Circular No. 751
Second Revision
Fiscal Service
Bureau of the Public Debt

TREASURY DEPARTMENT
Office

of the

Secretary

Washington, August 1, 1947

Department Circular No. 751, Revised, dated June 30, 1945, (31 C.F.R. 1945 Supp. 322) is
hereby amended in order to include Armed Forces Leave Bonds. That circular is issued as a Second
Revision to read as follows:
Subpart A— REGULATIONS PRESCRIBED
Sec. 322.1. Application of regulations.— Pursuant to the authority of Section 22 (i) of the
Second Liberty Bond Act, as amended, (59 Stat. 47, 31 U.S.C. and Supp. 757c(i)) and the Armed
Forces Leave Act of 1946, as amended by Pub. Law No. 254, 80th Cong., the following regulations
are hereby prescribed for the replacement out of the fund established by the Government Losses in
Shipment Act, as amended, of any losses to the United States resulting from payments made in con­
nection with the redemption of United States Savings Bonds and Armed Forces Leave Bonds, and
shall apply to losses resulting from payments made (1) by the Treasurer of the United States, (2)
by any Federal Reserve Bank or Branch, as Fiscal Agent of the United States, and (3) by any bank
or other financial institution duly qualified as a paying agent pursuant to Treasury Department
Circulars No. 750, Revised, or No. 811.
Subpart B— REPORTS OF LOSSES
Sec. 322.2. Loss to the United States.— A loss to the United States may result from an errone­
ous (or unauthorized) payment in connection with the redemption of the bonds.
Sec. 322.3. Erroneous payments reported to or discovered by Federal Reserve Banks.—If a
financial institution, qualified to pay savings bonds or Armed Forces Leave Bonds, finds an erroneous
payment to have been made, either before or after the bonds have been forwarded to the Federal
Reserve Bank, immediate report thereof should be made to the Federal Reserve Bank. Any such
erroneous payments so reported, and any other erroneous payments found by a Federal Reserve
Bank of bonds received from a duly qualified paying agent shall, so far as possible, be adjusted
between the Federal Reserve Bank and the paying agent concerned.
Sec. 322.4. Report to Treasury of cases involving erroneous payments.— Any such erroneous
payments which cannot be adjusted by a Federal Reserve Bank and any other erroneous payments
found after the account of the Treasurer of the United States has been charged shall immediately
be reported by the Federal Reserve Bank to the Treasury Department, Division of Loans and Cur­
rency, Merchandise Mart, Chicago 54, Illinois, in the case of Savings Bonds or, in the case of Armed
Forces Leave Bonds, to the Division of Loans and Currency, Washington 25, D. C.
Subpart C— FINAL DETERMINATION OF LOSSES
Sec. 322.5. Reported erroneous payment, general action by Treasury.— Following receipt of the
report of an erroneous payment, the Treasury Department will appropriately advise the paying
agent concerned, unless such action is unnecessary. The Department shall determine whether or not
appropriate adjustment may be effected with the persons concerned in the erroneous payment and
in this connection will expect the cooperation of the paying agent, if necessary.
(a) If it is determined that no loss to the United States will occur the paying agent
will be so advised.
(b) If it is determined that a final loss to the United States has occurred, the paying
agent will be given every opportunity to present the full facts relating to the payment for
consideration of the Secretary of the Treasury. If the Secretary shall determine that the
final loss resulted from no fault or negligence on the part of the paying agent, notice to
that effect will be given the paying agent and he will be relieved from liability to the United
States. If, however, the Secretary of the Treasury is unable to find that the loss resulted
from no fault or negligence on the part of the paying agent, notice to that effect will be
given such paying agent, who will be expected to make prompt restitution.
Sec. 322.6. Restitution by paying agents.— In no case will the Treasurer of the United States,
a Federal Reserve Bank (including any of its Branches) or the financial institution qualified as a
paying agent, whichever made the erroneous payment, be called upon to make restitution unless and
until the Secretary has determined, that a final loss has occurred as a result of an erroneous pay­
ment, and is unable to find that such loss resulted from no fault or negligence on the part of the
paying agent.

Subpart D— REPLACEMENT OF LOSSES OUT OF FUND
Sec. 322.7. Replacement and recovery in connection with losses.— When it is established to the
satisfaction of the Secretary of the Treasury that a loss has resulted from a payment made in con­
nection with the redemption of a United States Savings Bond or an Armed Forces Leave Bond, the
loss shall be subject to immediate replacement out of the fund established by the Government Losses
in Shipment Act, as amended. Any recovery or repayment on account of any such loss as to which
replacement shall have been made out of the fund, shall be credited to the fund.
Subpart E— INVESTIGATION OF LOSSES
Sec. 322.8. Use of United States Secret Service.— The Treasury Department, and, in appropriate
cases, Federal Reserve Banks, as Fiscal Agents of the United States, may request the Secret Service
to investigate losses and assist in the recovery of improper payments. The Treasurer of the United
States, the Federal Reserve Banks, and qualified paying agents should cooperate with the Secret
Service to the fullest extent in facilitating investigations and making recoveries and they will be
expected to take such actions as may be necessary on their part to complete such investigations and
recoveries.
Subpart F— SUPPLEMENTS, AMENDMENTS, ETC.
Sec. 322.9. Supplements, amendments, etc.—The Secretary of the Treasury may at any time
or from time to time supplement, amend, or withdraw, in whole or in part, the provisions of this
circular, or of any amendments or supplements thereto, information as to which will be furnished
promptly to the Federal Reserve Banks and to eligible financial institutions qualified to make pay­
ments of Savings Bonds or Armed Forces Leave Bonds under the provisions of Treasury Department
Circulars No. 750, Revised, and No. 811, respectively.
Compliance with the notice, public rule making procedure and effective date requirements of
the Administrative Procedure Act (Pub. Law 404, 79th Cong.; 60 Stat. 237) is found to be unneces­
sary with respect to this revision for the reason that it is issued merely to conform the provisions
of Department Circular No. 751, Revised, to Pub. Law 254, 80th Cong., amending the Armed Forces
Leave Act of 1946.
This revision will become effective on September 2, 1947.
A. L. M. WIGGINS
Acting Secretary of the Treasury

REGULATIONS GOVERNING ARMED FORCES LE AV E BONDS1
1947
Department Circular No. 793
Dated
November 12, 1946
Revised

TREASURY DEPARTMENT
Office

of the

Secretary

Washington, August 1, 194-7

Fiscal Service
Bureau of the Public Debt

To Members and Former Members of the Armed Forces of the United States and Others Concerned:
Armed Forces Leave Bonds are issued pursuant to the Armed Forces Leave Act of 1946 as amended,2
(hereinafter referred to as the Act) to living members and living former members of the Armed Forces
of the United States in settlement and compensation of accumulated leave under the conditions set forth
in the Act. In accordance with the terms of the Act these bonds are issued under authority and subject
to the provisions of the Second Liberty Bond Act, as amended. Pursuant to authority contained in said
Acts, Department Circular No. 793, dated November 12, 1946, (31 C.F.R. 1946 Supp., 324), which con­
tains the regulations governing Armed Forces Leave Bonds, is hereby amended and issued as a First
Revision to read as follows:
I SUBSTANTIVE REGULATIONS
.

324.1. Designation.— The bonds issued for the above purpose are designated “ Armed Forces Leave
Bonds.”
324.2. Issue and inscription.— Armed Forces Leave Bonds are issued by the Secretary of the Treas­
ury (hereinafter referred to as the Secretary) acting through the Army, Navy, Marine Corps, and Coast
Guard, which are designated as issuing agents. They are inscribed only in the names of living members
or living former members of the armed forces. In each case a single bond in the highest appropriate
multiple of $25 is issued where the amount due is $50 or more.3 The name and serial or service number
of the owner will be inscribed on the bond and at the option of the issuing agent the address may also be
inscribed. No exchange will be permitted for bonds of lower denomination, for example, if a bond for
$275 is issued to a particular owner he may not exchange that bond for a bond in the amount of $200
and a bond in the amount of $75.
324.3. Date and maturity of bond, and interest.— The issue date of a bond will be the first day of
the quarter-year period (January 1, April 1, July 1, or October 1) next following the date of discharge
from the armed forces of the former member whose name is to be inscribed thereon, provided he was
discharged on or after January 1, 1943, and prior to September 1, 1946, or in case a member of the
armed forces was still on active duty on September 1, 1946, his bond will be dated October 1, 1946. Each
bond will mature five years from its issue date, but shall be redeemable in cash at any time after Septem­
ber 1, 1947, at the option of the owner, at full face value plus accrued interest. Interest will accrue at
the rate of 2 / % per annum from the issue date to the date of maturity or to the last day of the month
A%
in which payment is made, whichever may be earlier. Interest will be paid only with the principal sum.
324.4. Transfer and pledge.— The bonds are nontransferable by sale, exchange, assignment, pledge,
hypothecation or otherwise, except that they may be assigned by the owner to the Administrator of
Veterans’ Affairs for redemption by such Administrator, for the purpose of paying premiums or the
difference in reserve in case of conversion to insurance on another plan or a policy loan made prior to
July 31, 1946, on a United States Government life insurance policy or a national service life insurance
policy under such regulations as may be prescribed by the Administrator of Veterans’ Affairs. No claims
by attempted transferees or by persons loaning money on the security of the bonds will be recognized.
324.5. Claims of creditors.— By the terms of the Act the bonds are exempt from claims of creditors,
including any claim of the United States, and shall not be subject to attachment, levy, or seizure by or
under any legal or equitable process whatever. Accordingly, no claims of creditors, assignees for the
benefit of creditors, trustees or receivers in bankruptcy or equity will be recognized, and no payment of
the bonds to any such persons will be made, either during the lifetime of the person whose name is
inscribed on the bonds or after his death.
324.6. Assignment to the Administrator of Veterans’ Affairs.— Any registered owner of an Armed
Forces Leave Bond who desires to use his bond in payment of premiums or other payments in connection
with United States Government life insurance or national service life insurance policies should mail or
deliver his bond to the Office of the Veterans’ Administration to which he pays his premiums. The bond
should be accompanied by a completed VA Form 9-1625, “ Directions for use of Proceeds of Armed Forces
Leave Bonds,” obtainable at any Veterans’ Administration Office. Before submitting the bond to the
Veterans’ Administration the assignment form printed on the bottom of the back of the bond should be
_________

X}

S ection 324.13 hereof relates to payment o f Armed Forces Leave checks to survivors.
*Pub. Law 704, 79th Ceng. Amendatory Act is Pub. Law 254, 80th Cong.
“Except that upon request settlement and compensation will be made entirely in cash to any applicant who has not made application for settle­
ment and compensation and who makes application to the Secretary after July 26, 1947, the date of enactment of the amendatory Act. The term
“ Secretary’' as used in this footnote means in the case of personnel of the Army, the Secretary of W ar; in the case of personnel of the Navy and
Marine Corps, the Secretary o f the N avy; and in the case of personnel of the Coast Guard, the Secretary of the Treasury, and the designated repre­
sentatives o f each such Secretary.

signed by the owner exactly as his name appears on the face of the bond. No certification or witness to
the signature of the owner on such assignment form will be required.
324.7. General 'payment and redemption provisions.— Armed Forces Leave Bonds may be redeemed
before, at, or after maturity, in accordance with the terms of this Circular at face value plus accrued
interest to the date of maturity or to the last day of the month in which payment is made, whichever may
be earlier. Only payment of the entire amount will be permitted. No partial payment and no reissue o f
the bond in part may be made. No power of attorney to request payment in behalf of the registered owner
will be recognized.
324.8. Payment to registered owner (general).— At any time after September 1, 1947, an owner
whose name is inscribed on the face of an Armed Forces Leave Bond may at his option redeem such bond
at full face value plus accrued interest upon (1) presentation of the bond (Unless marked “ DUPLI­
CATE” ) to any incorporated bank or trust company or other organization qualified as a paying agent
under the provisions of Department Circular No. 811 or any amendment thereto, (2) establishing his
identity, (preferably through use of original separation papers bearing his description and witnessed
signature) to the satisfaction of the paying agent, and (3) signing the request for payment exactly as
his name is inscribed on the face of the bond and adding his home or business address. Even though the
request for payment has been signed or signed and certified prior to the presentation of the bond, never­
theless, the paying agent is required to establish to its satisfaction the identity of the owner requesting
payment and such paying agent may require the owner to sign again the request for payment. No charge
will be made to the owner.
324.9. Payment to registered oivner (other cases).— Registered owners to whom qualified paying
agents are not readily accessible and those who have bonds marked “ DUPLICATE” should sign the
request for payment of their bonds in the presence of and have their signatures thereto duly certified by
an authorized certifying officer and should present and surrender their bonds to the appropriate Federal
Reserve Bank4 or to the Treasurer of the United States, Washington 25, D. C., except that bonds marked
“ DUPLICATE” should be forwarded to the Division of Loans and Currency, at the same address.

(a)
Certification of request.— After the request for payment has been signed the certifying officer
should complete and sign the certificate appearing at the end of the form for request for payment.

(h)
Certifying officers.— The following officers are authorized to certify requests for payment o f
Armed Forces Leave Bonds:
(1) Designated officers.— Certain designated officers in the Treasury Department in Wash­
ington ;
(2) Banks, trust companies and branches.— Any officer of any bank or trust company incorpo­
rated in the United States or its organized territories, or domestic or foreign branch o f
such bank or trust company, including those doing business in the organized territories or
insular possessions of the United States under Federal charter or organized under Federal
law, Federal Reserve Banks, Federal Land Banks, and Federal Home Loan Banks; any
employee of any such bank or trust company expressly authorized by the corporation for
that purpose, who should sign over the title “ Designated Employee” ; and Federal Reserve
Agents and Assistant Federal Reserve Agents, located in the several Federal Reserve
Banks;
(3) Veterans’ home or hospital or other facility.— The officer in charge of any home, hospital,
or other facility of the Veterans’ Administration (only for patients and members of such
facilities) ;
(4) Foreign countries.— United States diplomatic and consular representatives; notaries pub­
lic, if their official character and jurisdiction are certified by a United States diplomatic or
consular officer over an impression of his rubber stamp, or by his certificate over his seal
which should be transmitted with but should not be impressed on the bond itself. (See also
(5) h ereof);
(5) Armed Forces.— Commissioned officers of the Army, Navy, Marine Corps, and Coast
Guard of the United States for members of their establishments or civilian employees (and
the families of such members or employees) under their jurisdiction, persons in countries
in which there are no United States diplomatic or consular representatives and persons
who are in areas remote from such representatives;
(6) Issuing agents for savings bonds of Series E .— Any officer of a corporation which is
a duly qualified issuing agent for savings bonds of Series E may certify a request for pay­
ment of an Armed Forces Leave Bond. All certifications by such officers must be authenti­
cated by a legible imprint of the issuing agent’s dating stamp;
(7) Special provisions.— The Commissioner and Associate Commissioner of the Public Debt
the Chief of the Division of Loans and Currency, or a Federal Reserve Bank is authorized
4The Federal Reserve Banks are located at Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis. Minneapolis K a n « .
City, Dallas, and San Francisco.
’

to make special provision for certification in any particular case in which none o f the
officers authorized to certify requests for payment of Armed Forces Leave Bonds is readily
accessible.
(c)
Instructions to certifying officers.— Certifying officers should require positive identification of
the person signing a request for payment.
324.10. Right to payment on death of owner.— Upon the death of an owner of an Armed Forces
Leave Bond the bond becomes payable only to his survivors in the following order:
(a) Surviving wife or husband and children, if any, in equal shares;
(b) If such owner leaves no surviving spouse or children, then in equal shai’es to such owner’s
surviving parents, if any. If there are no such survivors the bond will be retired and the amount covered
into the general fund of the Treasury. Accordingly, payment will not be made to an executor or adminis­
trator of the estate of a deceased registered owner, and if a bond should come into the possession of
such an executor or administrator, or other person not a survivor, following the death of the owner it
should be immediately delivered to one of the survivors, if any; otherwise forwarded to the Division of
Loans and Currency, Washington 25, D. C., with a signed statement that there are no known survivors.
324.11. Payment to survivors.— Survivors of a deceased registered owner in the order provided in
the preceding section are entitled to receive payment of an Armed Forces Leave Bond at their option
and upon application to the Secretary of the Treasury at any time following the death of such registered
owner, whether before, upon or after maturity of the bond. Application for such payment should be
made on Form PD 2066, copies of which may be obtained from any Federal Reserve Bank. See section
324.15 for instructions as to filing the application.
(a) Definition of survivors.— Survivors are defined in the Act as follows:
(1) “ Spouse” means a lawful wife or husband;
(2) “ Children” include
(a) a legitimate child;
(b) a child legally adopted;
(c) a stepchild, if, at the time of death of the member or former member of the armed
forces, such stepchild is a member of the deceased’s household;
(d) an illegitimate child, but in the case of a male member or former male member of the
armed forces only if he has been judicially ordered or decreed to contribute to such
child’s support; has been judicially decreed to be the putative father of such child; or
has acknowledged under oath in writing that he is the father of such child; and
(e) a person to whom the member or former member of the armed forces at the time of
death stands in loco parentis and so stood for not less than twelve months prior to
the date of death;
(3) “ Parent” includes father and mother, grandfather and grandmother, stepfather and step­
mother, father and mother through adoption, and persons who, for a period of not less than
one year prior to the death of the member or former member of the armed forces, stood
in loco parentis to such member or former member: Provided, That not more than two
parents may receive the benefits provided under this Act and preference shall be given to
the parent or parents, not exceeding two, who actually exercised parental relationship at
the time of or most nearly prior to the date of the death of such member or former member
of the armed forces.
v
(b) Payment only.— Only payment of the entire amount of the bond will be permitted. No partial
payment and no reissue of the bond in part may be made. Payment in all cases will be made by separate
checks drawn in the proper amounts to the individual survivors, except that in the case of a survivor
under 17 years of age or under mental disability, the check will be drawn either to the guardian of such
survivor, if the Secretary has received notice of the appointment of such guardian, or in the absence of
such notice, to a proper person selected by the Secretary, for the use and benefit of such survivor, without
the necessity of resorting to judicial proceedings for the appointment o f a legal representative.
(c) All survivors must join.— Since no partial payment or reissue may be made, all survivors of the
class entitled to receive payment must unite in the application, except that in the case of survivors under
17 years of age or under mental disability, legally qualified guardians, if any, may sign in their behalf,
and in the absence of such legal guardians, such proper persons as the Secretary may select to act on
behalf of such survivors.
(d) Time of vesting of survivors’ rights.— A survivor’s right to receive payment becomes fixed upon
the date of the death of the owner. If a survivor dies before receiving payment the right to receive pay­
ment of his or her share of the bond passes to the estate of such survivor. For example, if the registered
owner dies and leaves a widow and two children and the widow dies prior to receipt of payment, her
share passes to her estate and payment of the bond will be made one-third to the widow’s representative
and one-third to each of the surviving children. If no executor or administrator is appointed for the
estate of a deceased survivor, settlement may be made in the same manner as provided for the settlement
without administration of estates of deceased owners of United States registered bonds.

324.12. Loss, theft, destruction, mutilation, or defacement of bonds.— If an Armed Forces Leave
Bond is lost, stolen, destroyed, mutilated or defaced, relief may be granted before maturity by the issue
of a substitute bond to be marked “ DUPLICATE” , or at or after maturity by payment of the bond in
accordance with the provisions of Section 8 of the Government Losses in Shipment Act (U. S. C. 1940
Ed., title 31, sec. 738a). Relief in such cases will be governed by the regulations contained in Department
Circular 300, as amended. In any such case immediate notice of the facts, together with a complete
description of the bond (including name and address of owner, bond serial number, amount, and issue
date), should be given to the Treasury Department, Division of Loans and Currency, Washington 25,
D. C., which will forward approiJriate forms for requesting relief, together with full instructions. Usually
such relief will be granted without requiring a bond of indemnity.
324.13. Checks.—
(a) Payment to survivors of checks issued to the registered owner (1) in full settlement of leave,
(2) in payment of bonds, or (3) in payment of the odd amount due the member or former member o f
the armed forces over and above the bond issued in settlement of leave, will be made to the persons
entitled as provided in the above regulations relating to bonds. Accordingly, such checks received by
executors or administrators of deceased registered owners should not be deposited for collection but
should be turned over to the survivors or returned to the issuing office with a statement of the facts.
(b) In the case of a survivor entitled to payment who dies before receiving and collecting the check
issued in the name of the survivor, payment will be made to his estate.
II. PROCEDURE

324.14. Presentation and surrender of bonds.— Presentation and surrender of an Armed Forces
Leave Bond should be made in accordance with the applicable provisions of this Circular. The use o f
registered mail is suggested if the owner does not present and surrender the bond in person. Bonds
marked “ DUPLICATE” issued in lieu of lost, stolen, destroyed, mutilated, or defaced bonds should be
submitted to the Treasury Department, Division of Loans and Currency, Washington 25, D. C.
324.15. Payment to survivors.— Survivors applying for payment under section 324.11 hereof should
forward the bonds, accompanied by the applications on Form PD 2068, to the appropriate Federal
Reserve Bank or to the Treasury Department, Division of Loans and Currency, Washington 25, D. C.
Usually payment will be expedited by the use of the Federal Reserve Banks. The form must be accom­
panied in each case by (1) a death certificate for the registered owner, (2) an explanation of any dis­
crepancy between the name as given on the face of the bond and the name as given in the death certifi­
cate, and (3) in case of an application by parents other than the actual father and mother still living
together, a signed and sworn statement giving the basis for the claim of parental relationship as defined
in the Act (see 324.11 hereof). The right is reserved to require other and further evidence in cases
where such action appears desirable. Federal Reserve Banks as fiscal agents of the United States are
authorized to make payment to survivors upon applications in accordance with these regulations, but
may submit any doubtful or unusual cases to the Treasury Department, Division of Loans and Currency,
for final decision.
’
324.16. Designation of agents to make determination.— The various Federal Reserve Banks as fiscal
agents of the United States, the Fiscal Assistant Secretary of the Treasury, the Assistant to the Fiscal
Assistant Secretary, the Commissioner and Associate Commissioner of the Public Debt, and the Chief o f
the Division of Loans and Currency are designated to make determinations on behalf of the Secretary
as provided in the Act.
III. GENERAL

324.17. Taxation.— Under the Act all amounts paid or payable under Section 6 in cash, bonds or
both (except interest in the case of bonds) shall be exempt from taxation.
324.18. Address for communications.— All inquiries after issue in connection with the payment o f
or transactions in Armed Forces Leave Bonds should be addressed to the Federal Reserve Bank of the
District in which the owner resides, or to the Treasury Department, Division of Loans and Currency,
Washington 25, D. C., except that any inquiries regarding the use of such bonds in connection with
Government life insurance or national service life insurance payments should be addressed to the Office
of the Veterans’ Administration to which the assured has been paying premiums, or to the Director o f
Insurance Accounts Service, Veterans’ Administration, Washington 25, D. C.
324.19. Additional regulations.— The Secretary of the Treasury may at any time, or from time to
time, prescribe additional, supplemental, amendatory or revised rules and regulations governing Armed
Forces Leave Bonds.
~
Compliance with the notice, public procedure, and effective date requirements of the Administrative
Procedure Act (Pub. Law 404, 79th Cong.; 60 Stat. 237) is found to be unnecessary with respect to this
revision for the reason that it is issued merely to conform the regulations governing Armed Forces Leave
Bonds to the Act (Pub. Law 254, 80th Cong.) amending the Armed Forces Leave Act of 1946 under
which amendatory Act Armed Forces Leave Bonds are made redeemable at the option o f the owners at
any time after September 1, 1947.
This revision will become effective on September 2, 1947.
A. L. M. WIGGINS
Acting Secretary of the Treasury

TREASURY DEPARTMENT
Office o f the Secretary
WASHINGTON

August 1, 1947

To the Savings Bond Paying Agent Addressed:
With this letter you will receive copies of the official Treasury Department Circulars and
instructions governing the payment of Armed Forces Leave Bonds. You will observe that the
procedure and instructions are very similar to those governing the payment of savings bonds.
Inasmuch as your institution is a qualified paying agent for savings bonds, qualification as a payingagent for the leave bonds is possible automatically by the act of paying such a bond after September
1, 1947. Such a payment will render your institution subject to the terms and conditions applicable
to the payment of such bonds and subject to the same terms and conditions as are set forth in your
Application-Agreement for the payment of savings bonds.
The Treasury has the responsibility of fulfilling that part of the recently enacted law which
makes the proceeds of the bonds available to owners thereof on their demand after September 1,
1947. The splendid organization available for the payment of savings bonds, it seems to me, is
ideally suited to carrying out this responsibility. I am certain too that your institution will want
to assist the veterans.
Your institution is especially well suited also to counsel the veterans concerning the desir­
ability of holding their bonds if they do not need the cash at this time. On this point particular
attention is invited to the President’s comment when he signed the bill. You will recall he said, in
part, “ If, on the other hand, veterans choose the wise course, hold their bonds and continue to draw
2 1 /2 percent interest, their dollars will buy more when they cash their bonds after inflationary
conditions have eased. I urge veterans not to cash their bonds unless they are in urgent need of
the money now.”
I believe that if such information is passed on to the veterans and if they understand that
they can get their funds at any future time on their demand, many of them who do not need the
cash now will hold them to maturity when, of course, interest ceases.
I. think you will concur with me that the veteran, and the nation, will benefit most by not
cashing his bond at this time, unless, of course, circumstances require such cashing.
One more thing I should like to stress and that is the matter of identification of owners. We
want to be as certain as we possibly can that the rightful owner receives the full value due him
at the time he cashes his bond. Accordingly, I strongly urge that you require each veteran, at least
those who are not fully known to your institution, to present the original separation papers
furnished to him, if he is a discharged veteran, and to use extra care and diligence where these
papers are not available.
Your cooperation will be very much appreciated.
Very truly yours,
A. L. M. WIGGINS,
Acting Secretary of the Treasury.

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