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M1SCL. 14. 20M-10125 FEDERAL RESERVE BANK OF DALLAS CIRCULAR #3. .December v l * 1014*. TO THE MEMBER BANK ADDRESSED: I am pleased to inform you th at th is bank is in readiness to re c e iv e from i t s member banks fo r rediscount notes and b i l l s rep resen tin g the h igh est c la s s , most liq u id , short time paper which you may have a v a ila b le a r is in g from actual commercial tran s a ctio n s, proceeds o f which have been used fo r a g r ic u ltu r a l, com m ercial or in d u s tria l purposes. On the con tra ry, we cannot accept paper rep resen tin g investments in lands, p la n ts, machinery, e t c . , nor paper given fo r ca rryin g s e c u r itie s such as stocks and bonds, nor paper, which, in any sense, can be construed as having been given fo r specu lative purposes. Beginning w ith th is date and u n til fu rth er n o tic e , the rate o f discount o f th is bank w i l l be fiv e and on e-h alf*p ercen t ( 5r|-} fo r t h ir t y day m a tu rities and s ix percen t (6 } fo r lon ger raaturi* t ie s . The a tte n tio n o f member banks is c a lle d to C ircu la r #13, issued by the Federal Reserve Board and sent to a l l banks togeth er w ith copies o f regu la tion s accompanying same. This c ir c u la r f u l l y described paper e l i g i b l e fo r rediscount in Federal Reserve Banks, and the accompanying regu la tion s ex p la in the requirements o f the Federal Reserve Board r e la t iv e to endorsements, e t c . Considerable d ela y in r e c e iv in g c r e d it fo r items sent us for discount has been occasioned by the member banks n e g le c t in g to place on said paper an endorsement w aivin g demand, n otice and p r o te s t, as is requ ired* A l l paper o ffe r e d fo r rediscount must be fre e from any endorsement., which might impair or r e s t r i c t the nego t i a b i l i t y o f the instrument. Notes secured by c h a tte l mortgage should have a c e r t i f i e d copy o f the mortgage o r a c e r t i f i c a t e from the Recorder that same has been f i l e d for record attached thereto?* Notes secured by warehouse r e c e ip ts fo r co tto n or other commodities must have said re c e ip ts attached. For the present and u n til fu rth er n o tic e , paper which you o f f e r fo r rediscount must be accompanied by a w r itte n state-ment from an o f f i c e r o f your bank to the e f f e c t that to the best o f his knowledge and b e l i e f a ll. notes and b i l l s submitted are e l i g i b l e under the requirements o f C ircu lar 13. Moreover, to f a c i l i t a t e matters where makers o f notes not rated by the M ercantile Agencies and no c o lla te ra l, is attached, inform ation concerning the fin a n c ia l con d ition and standing o f said makers must accompany the a p p li ca tio n . This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - A re s o lu tio n au th orizin g your bank to rediscount paper w ith th is bank must be passed by your Board o f D ire c to rs , and form o f same w i l l be furnished you upon a p p lic a tio n . In view o f the fa c t that under present regu la tio n s the amount o f paper having a m aturity o f lon ger than n in ety days, which th is bank is perm itted to accept, is very r e s t r ic t e d , being o n ly twentyf i v e percent (25) o f our paid in c a p ita l stock, i t is hoped that so fa r as p ossib le your o ffe r in g s w i l l be confined to paper maturing w ith in n in ety days from the date o f a p p lic a tio n . The Governor is at th is time in Washington in conference w ith the Governors o f the other Federal Reserve B-nks, working on a plan whereby the handling o f tr a n s it items can be taken up by th is bank fo r i t s members, and upon his retu rn , we hope to get out a b u lle tin r e la t iv e to the re s u lts accomplished at the con feren ce. I t is the d e s ire o f our d ir e c to r s and o f f i c e r s to serve you in e v e ry way p ossib le in order that a l l b e n e fits intended by the Federal Reserve Act may be f u l l y r e a liz e d . Very r e s p e c t fu lly , R. L . VAR ZANDT, A c tin g Governor. mvz/wsK
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