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F e d e r a l Re s e r v e bank OF DALLAS Dallas, Texas, September 28, 1962 FOOD COUPON PROGRAM To the Bank Addressed: Enclosed is a revised statement of the Department of Agriculture dated September 1962, entitled “Procedures for Commercial Banks in Handling Food Coupons under the Pilot Food Stamp Program.” This revised procedure is being forwarded to member and nonmember banks in the vicinity of Choctaw County, Oklahoma, which is among the additional areas which will be added to the program on Novem ber 1, 1962. As outlined in our circular letter dated May 25,1961, which transmitted the original procedure of the Department of Agriculture, this bank and its branches, as fiscal agents of the United States, w ill pay these food coupons and will accept them for immediate credit when received prior to 2:00 p.m. Mondays through Fridays. Such credit will be given subject to verification and final payment, and any necessary adjustments will be made under appropriate advice to sending banks. Member and nonmember clearing banks may forward the food coupons to us by means ordinarily used in forwarding checks for collection. Nonmember banks should forward the coupons through usual banking channels. Food coupons forwarded to this office for payment should be separately sorted from other items, with only the total number and dollar amount of each denomination shown on the cash letter form. For example: 1.000 Food Coupons @ $ .50 = $ 500.00 1.000 Food Coupons @ 2.00 = 2,000.00 2.000 $2,500.00 It would facilitate the handling of food coupons if they were forwarded in batches of 100 where quantity warrants. If you have any question regarding the food coupon collection procedure, please let us know. Please acknowledge receipt of this letter and the enclosed statement by signing and returning the attached postal card. Yours very truly, Watrous H. Irons President Enclosures This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) Commercial Banks Procedures for Commercial Banks in Handling Food Coupons under the Pilot Food Stamp Program The President announced on August 2, 1962 those additional areas to which the Food Stamp Program will be offered. The program will be continued in Franklin County, Illinois; Floyd County, Kentucky; City of Detroit, Michigan; part of St. Louis and Itasca Counties, Minnesota; Silver Bow County, Montana; San Miguel County, New Mexico; Fayette County, Pennsylvania; and McDowell County, West Virginia where pilot projects a re in operation and will be offered to the following a reas with a targ et date for the firs t sale of coupons as indicated. The actual date coupon sales will begin in any new area in which the program is inaugurated may vary from the e s tablished target dates. October 1; Independence County, Arkansas; Nash County, North Carolina; Multnomah County, Oregon; Luzerne County, Pennsylvania; Dickenson, Lee and Wise Counties, Virginia; Logan, Mingo and Wayne Counties, West Virginia. (The program will also be extended to the balance of St. Louis and Itasca Counties, Minn esota.) November 1; Jefferson County, Alabama; Mendocino County, California; City of St. Louis, Missouri; Choctaw County, Oklahoma; Grays Harbor and Pacific Counties, Washington; and Douglas County, Wisconsin. December 1; Vanderburgh County, Indiana; Knott County, Kentucky; Evan geline Parish, Louisiana; Lucas County, Ohio; and Grundy, Hamilton, Marion and Sequatchie Counties, Tennessee. The Pilot Food Stamp Program is operated by the United States Department o f A griculture. Under this program , eligible households will exchange an amount of money representing their norm al expenditures for food for an allotment of food coupons of higher monetary value. The coupons will be used to purchase com m er cial brand foods a t re ta il food stores which have been approved to accept coupons by the A gricultural Marketing Service, U.S. Department of A griculture. R etailers accepting the coupons will be able to redeem them a t face value, for account or payment in cash through the facilities of comm ercial banks, including both m embers and non-members of the Federal Reserve System. R etailers may also redeem coupons through approved food wholesalers. These wholesalers will subsequently redeem the coupons through the facilities of com m ercial banks. Coupons a re engraved documents about fee size of U.S. currency and a re printed by fee Bureau of Engraving and Printing, U.S. Department of fee T reasury. Coupons a re printed in two denominations: fifty-cent coupons (orange) and two dollar coupons (blue). Coupons a re an obligation of fee United States within fee meaning of 18 U. S. C. 8. The provisions of Title 18 of U.S. Code "Crim es and Criminal Procedure" SEP 1962 - 2 - relative to counterfeiting and alteration of obligations of the United States and the uttering, dealing in, e tc ., of counterfeit obligations of the United States a re ap plicable to these coupons. Also, the provisions of 31 U .S.C . 231 relating to the making of false claim s against the United States a re applicable to transactions involving these coupons. Under Regulations issued by the Secretary of Agriculture: 1. Authorized retail food stores and wholesale food concerns may present food coupons for redemption to com m ercial banks for account or for cash. 2. Coupons submitted to banks for redemption by approved re ta il food stores m ust be accompanied by a properly executed and signed Form AMS-253, Retail M erchant's Food Stamp Program Redemption Certificate (Exhibit A). The back of each coupon m ust be stamped or otherwise marked with the name or Food Stamp Program Authorization Number of die store. 3. Coupons submitted to banks for redemption by approved wholesaler food concerns m ust be accompanied by a properly executed and signed Form AMS-253-1, W holesalers' Food Stamp Program Redemption Certificate (Exhibit A). Attached thereto m ust be the properly executed and signed Form AMS-253 for each retail food store from which the wholesaler has accepted food coupons. The back of each coupon m ust be stamped or otherwise marked with the name or Food Stamp Program Authorization Number of both the reta il food store and die wholesale food concern. In addition the najne or Food Stamp Program Authorization number of each re ta ile r and the value of coupons each certificate represents m ust be listed on the reverse of the W holesaler's certificate. 4. Banks shall not accept coupons for redemption from unauthorized reta il food stores, wholesale food concerns, or any other unauthorized persons, partnerships, corporations, or other legal entities. Banks may require persons presenting coupons for redemption to exhibit their Agricultural Marketing Service Food Stamp Program Authorization, Form AMS-2 54 ( E x h i b i t A). a. Coupons accepted for redemption m ust be cancelled by the firs t bank receiving the coupons by indelibly marking "paid" or "cancelled" to gether with the name of the bank or its ABA routing sym bol-transit number on the face of the coupons by means of an appropriate stamp. The coupons should not be endorsed by any bank. b. A portion of a coupon consisting of not less than three-fifths (3/5) of a whole coupon may be accepted for redemption a t face value. A portion of a coupon of less than three-fifths (3/5) of a whole coupon will not be accepted for redemption. - 3 - 5. The Food Stamp Program Redemption C ertificates shall be held by the r e ceiving bank until the coupons have been paid by the Federal Reserve Batik, after which the certificates shall be forwarded weekly by the receiving bank to the A gricultural Marketing Service's local food stamp office. Banks will be notified of the address of this local office by the A gricultural Marketing Service. 6. Banks which a re m em bers of the Federal Reserve System and nonmembers clearing banks may forward cancelled coupons directly to Federal Reserve Banks for payment in accordance with applicable regulations or instructions of the Federal Reserve Banks. Other banks may forward cancelled coupons through ordinary collection channels. 7. Banks may forward cancelled coupons via fourth-class m ail (parcel post), provided that the Food Stamp Authorization Number or the name of the food store or wholesale food concern is stamped on the coupon rath er than hand written out. Under postal regulations, any handwritten entry on any p art of a mailed item subjects the entire package to the firs t c lass m ail rate. Shipments under fourth-class m ail may be expedited through the Special Handling procedure of the U.S. Post Office. 8. Banks may wish to reduce sorting and handling costs of coupons by requiring those depositors of substantial numbers of coupons to pre-cancel die coupons for the bank and so rt them into bundles containing a specific number of coupons (100, for example} prior to making a deposit. This would eliminate all han dling of individual coupons by the bank except for any vertification count the bank may wish to make. This type of arrangem ent m ust be between the bank and the custom er on an individual basis. If this procedure is followed, the re ta ile r or wholesaler m ust cancel the face of the coupon using a stamp that contains: (1) the Food Stamp Program Authorization Number of the. reta il or wholesale concern; (2) the word "PAID" in‘approximately 3/4 inch high letters, and (3) the ABA routing sym bol-transit number of the bank. All lettering on the stamp used by the re ta ile r or wholesaler m ust be in outline or open type, not solid type. The stamp shall not exceed 1-1/2" by 2". Banks shall inform the AMS local food stamp office if they intend to use this procedure. 9. Federal Reserve Banks acting a s fiscal agents of the United States, a re au thorized to receive cancelled coupons from member banks of h e Federal Reserve System and nonmember clearing banks sent in accordance with in structions to be issued by the Federal Reserve Banks and to pay such coupons. 10. While in the course of shipment cancelled coupons shall be considered to be a t the risk of the U.S. Department of Agriculture, if h e bank transm itting such coupons has exercised due diligence and taken ordinary care in making the shipment. Reports of loss, destruction or damage shall be given promptly on discovery to all of the following: A gricultural Marketing Service; the n earest Secret Service Office; the Post Office or o ther c a rrie r; and the Secretary of the T reasury, Bureau of Accounts. EXHIBIT A - 4 - FORM A FP W O V E P - H U P. BU R. HO. 4 Q -R 3 te » 1 IN ST R U C T IO N S T O R E T A IL M ERCHANTS: (1 ) |n p k i m u o i co u p o n i to b a n k a, s e p a r a te c o u p o n * b y d e n o m in atio n . (2) BLOCK At S how th e n a m e an d a d d re s s o f th e bank o r w h o le s a le r re d e em in g th e c o u p o n s. (3) BLOCK B: Show th e s to r e ’s nam e, a d d r e s s , a n d a u th o riz a tio n num ber a n d th e d a te . (4 ) BLOCK Ct S how th e v a lu e o f c o u p o n s b e in g re d e e m e d . (SI BLO CK Oi B e s u r e th e c e r tif ic a tio n i s s ig n e d by th e s to r e ’s repre s e n ta t iv e a n d th a t h is d t l e i s g iv e n . (A ) NAME AN D A D DR ESS O P BANK o r w h6 l e s a l e r A u th o riza tio n No. BANK'S STAMP ( 0 T O T A L V A LU E OP C O U PO N S REOEEM CD 1 (D ) C E R T IF IC A T IO N T h i s i s t o c e r tif y (h at th e food c o l o n s su b m itte d h e re w ith for red e m p tio n w ere, io a c c o rd a n c e w ith th e re g u la tio n s gov e rn in g p i l o t F o o d Stam p P r o je c t a , r e c e iv e d by th e a b o v e nam ed a u th o riz e d r e ta il food s to r e ia e x c h a n g e fo r e lig ib le fo o d s. I t i s fu rth e r c e r tif ie d d r a t n o n e o f s a id c o u p o n s w ere k now ingly a c c e p te d from a n y p e rs o n w ho b a d n o tig h t to tr a n s fer, e x c h a n g e , <H n e g o tia te s u c h c o u p o n s u n d e r th e r e g u la tio n s . (FIRM'S MCRRCSCNTATJVCI RETAIL MERCHANT’S FOOD STAMP PROGRAM REDEMPTION CERTIFICATE FORM A P P R O V E O - B U D . S U R . HO. 40-R>2*7 IN S T R U C T IO N S TO W H O LESA LERS: ( I ) In p r e s e n tin g c m p o n a to b a n k a , s e p a r a t e c o u p o n s by d e n o m in a tio n . (2 ) BLO CK Ai S h o w nam e a n d a d d r e s s o f h a n k re d e e m in g o r c r e d itin g c o u p o n s- (3 ) BLO CK Bi Show firm ’s n a m e , a d d r e s s , a n d s n o w r ix a d o n t a n b a a n d th e d a te . (4 ) BLOCK Ci S how v a lu e o f c o u p o n s b e in g re d e e m e d . (S) BLO CK O: B e a n te th e c e r tif ic a tio n i s s ig n e d by ( 4 ) B L O C K C i (O " r e u s r s a ) F u r n is h n s m c s and a u th o ris a tio n n u m b e rs o f r e ta ile r s a n d v a lu e o f c o u p o n s re d e e m e d by e a c h . (7 ) A tta c h c e r tif ic a te s r e c e iv e d from r e t a i l e r s . ( • ) If y o n a ls o e n g a g e in r e m i l b u s in e s s , p r e p a re a s e p a r a t e R e ta il Mer c h a n t’s F o o d S tam p P ro g ra m R e d em p tio n C e r tif i c a t e (F o rm AMS*?S3) for a l l c o u p o n s re d e em e d from y o u r m a i l o w le t(A ) NAME AN D A D D R E SS O F BANK A u th o riz a tio n N o ,_ B A N K 'S ST A M P I (C> T O T A L V A L U E O P (D ) C E R T IF IC A T IO N T h is i s to c e r tif y th a t th e food c o n p o a s s u b m itte d h e re w ith fo r red e m p tio n w e r e , i a a c c o rd a n c e w ith th e r e g u la tio n s gov e rn in g P i l o t F o o d S tam p P r o j e c t s , r e c e iv e d by th e a b o v e na m ed a u th o riz e d w h o le s a le food c o n c e rn from a u th o riz e d r e ta il food s to r e s a c c o m p a n ie d by th e a tta c h e d F o o d Stam p P ro g ram R e d em p tio n C e r tif ic a te s s ig n e d by th e food r e ta ile r s . I t i s fu rth e r c e r tif ie d t h a t n o n e o f s a id c o u p o n s w ere kn o w in g ly a c c e p te d from a n y p e r s o n w h o h a d no r ig h t to tr a n s f e r , e x c h a n g e , o r n e g o tia te s a id c o u p o n s u n d e r th e r e g u la tio n s . By T itle (FIRM'S RCRRCSeMTATIVE) WHOLESALER’S FOOD STAMP PROGRAM REDEMPTION CERTIFICATE TO TA L VALU E O P S TAM PS • BI > BI K A S A s < * o Ik TOTAL* N AM E OR A U T H O R IZ A T IO N NO. OP R E T A I L E R BI M K £ • € € 3 . • c• o :-s • o < 3 li gi gf (E ) FORM AMS-253-1 (R E V ER S E) 5 F O R M AMS* 2 54 (7- 1-6 2 ) U .S . D E P A R T M E N T O F A G R IC U L T U R E A G R I C U L T U R A L M A R K E T IN G S E R V I C E FOOD STAMP PROGRAM AUTHORIZATION FORM AMS- 254 THIS C E R T IFIE S th at Acted Six*: 6’ x 4is g ran ted au th o rizatio n to a c c e p t and redeem food coupons on condition th a t the accept* a n c e and redem ption o f a ll c o l o n s sh all b e in acco rd an ce w ith th e ru le s and regula* tio n s governing th e F ood Stamp Program and such re v isio n s and am endm ents a s may b e made. A change in ow nership v o id s th is authorization. No. D a te o t A p p r o v a l A r e a R e p r e s e n ta tiv e * A M S, V SD A
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