Full text of District Notices (Federal Reserve Bank of Dallas) : A Timely Function Which Every Eligible Bank in the Eleventh District Should Assume, [Circular No. 18-28]

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M IS C L . 14-8-28-18

FEDERAL RESERVE BANK
O F DALLAS

Circular Number 28
Series of 1918.

Dallas, Texas, May 25, 1918.

A TIMELY FUNCTION WHICH EVERY ELIGIBLE BANK
IN THE ELEVENTH DISTRICT SHOULD ASSUME

TO THE BANK ADDRESSED:
In order to co-operate with the Government in the financing of its war acti­
vities, every eligible bank should qualify as a War Loan Depositary at the earliest
possioie moment, under the method outlined in Treasury Department Circular No* 92,
and supplement thereto, and War Loan Circular N o » 14, dated April 10th and 23rd,
respectively* The procedure necessary is extremely simple and is stated fully in
the circulars noted above*
By so qualifying, banks are enabled to pay for their subscriptions to the
issues of Liberty Loan Bonds (on installment dates, or in full) and Treasury Cer­
tificates of Indebtedness, BY CREDIT on their books, and may be sure that reason­
able notice will be given (at least three or four days) before the withdrawal of
any part of the funds lodged with them as such Depositaries. These deposits are
withdrawn pro rata, in accordance with the total amount the Government intends to
disburse upon payment of funds to it*
It is the purpose of the Treasury Department, by the creation of War Loan De­
positary accounts, to avoid unnecessary dislocation of funds in the floating of
the various issues of Government obligations, and to aid in maintaining these funds,
as far as possible, in the ordinary channels of trade and banking, until they are
actually disbursed, whereupon they naturally return to these channels immediately,
Theoretically, the funds raised by War Credits, with proper co-operation with
banks, are never withdrawn from trade channels*
t must be recognized that the
purpose of floating war issues, is to raise a war'CREDIT for the Government, but
it does not necessarily follow that the Government desires the proceeds to be paid
to it in cash at the time the credit is made available to it.
Yours very truly,
R* L» VAN ZANDT,
Governor.

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