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FEDERAL. RESERVE BANK
OF DALLAS

April 3, 1933.

To All Banking Institutions and Others
Engaging in Foreign Exchange Transactions
in the Eleventh Federal Reserve District:

The Federal Reserve Bank of Dallas has been instructed through an Executive Order of the Presi­
dent of the United States, and in Treasury regulations issued subsequent thereto, to keep itself cur­
rently informed as to foreign exchange transactions entered into or consummated within this District.
The Executive Order of the President, dated March 10, 1933, provides in part as follows:
“ Until further order, no individual, partnership, association, or corporation, including any
banking institution, shall export or otherwise remove or permit to be withdrawn from the
United States or any place subject to the jurisdiction thereof, any gold coin, gold bullion, or
gold certificates, except in accordance with regulations prescribed by or under license issued
by the Secretary of the Treasury.
“ No permission to any banking institution to perform any banking functions shall author­
ize such institution to pay out any gold coin, gold bullion, or gold certificates except as author­
ized by the Secretary of the Treasury, nor to allow withdrawal of any currency fo^ hoarding,
nor to engage in any transaction in foreign exchange except such as may BUlmdertaken Tor
legitimate and normal business requirements, for reasonable traveling and other personal
requirements, and for the fulfillment of contracts entered into prior to March 6, 1933.”
You will note that this order prohibits all transactions in foreign exchange except those under­
taken (a) for legitimate and normal business requirements or (b) for reasonable traveling and other
personal requirements and (c) for the fulfillment of contracts entered into prior to March 6, 1933.
In order that the Federal Reserve Bank of Dallas may keep itself informed as to the foreigh
exchange transactions entered into or consummated within the Eleventh Federal Reserve District, all
individuals, corporations and partnerships, including all banking institutions transacting a foreign ex­
change business in this District, are required:
1. To obtain from each person* to whom they sell foreign exchange, directly or indirectly, a
written declaration signed by such person* describing the purpose for which the foreign
exchange is purchased and certifying that the transaction in no way violates the Act of
March 9, 1933, or the Executive Order of March 10, 1933, or any regulation issued there­
under; and
2. To file with the Federal Reserve Bank of Dallas immediately upon receipt of this circular
a written report showing the foreign exchange position of such individual, partnership or
corporation; and
3. In case of individuals, partnerships and corporations having daily transactions in foreign
exchange, to file a daily report ; in case of only occasional or periodic transactions, reports
should be made weekly. All reports should show the foreign exchange position as of the date
of the report.
Reports should be classified by currencies and should show the amounts in dollars.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Date.

FOREIGN EXCHANGE CERTIFICATE

THE UNDERSIGNED CERTIFIES that foreign exchange on__________________________________
Country

in amount of___________________________________________________________...purchased this day, is for:
Dollars
*(a)

legitimate or normal business requirements;

*(b)

traveling or other personal requirements;

* (c)

for the fulfillment of exchange contracts entered into prior to March 6, 1933;

that the transaction is not for the purchase of savings or investments in a foreign country or for spec­
ulation, and that the transaction in no way contravenes the Act of March 9, 1933, the Executive Order
of March 10, 1933, or any regulation issued thereunder.

By.

*Mark with check the purpose for which
the exchange was purchased.

M. 0.

No.

REFERENCE: DRAFT No.
CABLE No.

UNTIL FURTHER ORDER, ONLY INDIVIDUALS, PARTNERSHIPS OR CORPORATIONS
DEALING IN FOREIGN EXCHANGE WHO CARRY THEIR OWN ACCOUNTS ABROAD OR WHO
CARRY ACCOUNTS ON THEIR BOOKS FOR FOREIGNERS, ARE REQUIED TO MAKE SUCH
REPORTS.
The Executive Order of March 10 permits foreign exchange transfer for fulfillment of contracts
entered into prior to March 6, 1933. Every individual, partnership or corporation dealing in foreign
exchange in this District is directed to forward to the Federal Reserve Bank of Dallas a detailed list of
all foreign exchange contracts entered into prior to March 6, 1933, for the delivery of foreign exchange
after that date. Contracts should be classified by currencies and should show; the maturity of each con­
tract. The Federal Reserve Bank of Dallas is to be notified in writing immediately as such contracts are
fulfilled.
In case of doubt as to whether a particular foreign exchange transaction comes within the terms
of the Act of March 9, 1933, the Executive Order of March 10,1933, and the regulations issued there­
under, the question should be submitted to the Federal Reserve Bank of Dallas. The term “ foreign
exchange” as used in this circular means checks, drafts, bills of exchange, cable transfers or any form
of negotiable or assignable instrument or order, used: (a) to transfer, credit, or to order payment of
funds in any foreign country; or (b) to transfer, credit, or to order the payment of funds within the
United States for foreign account.
Form of certificate to be executed by all persons to whom transfers of foreign currency are being
made, is enclosed herewith. The person dealing in foreign exchange may prepare duplicates of the en­
closed certificate or may prepare a different form of certificate in which the transaction is described in
detail. Such forms must in all cases contain the certificate that the exchange transaction is for one of
the purposes enumerated above.
Such certificate reciting the purpose for which the foreign exchange is required need not be exe­
cuted by the purchaser in cases involving transactions under $100 in amount. A seller in reporting
these transactions to the Federal Reserve Bank should, however, certify that in his opinion they were
usual and normal transactions. In case the small transactions should assume abnormal volume, the cer­
tificate should then be required from all purchasers. As to transactions involving more than $100 and
less than $1,000 the certificate showing the purposes for which the exchange is required must in all
cases be executed by the purchaser. As to the transactions involving more than $1,000 a detailed writ­
ten explanation of the purpose for which the exchange is required must be executed by the purchaser,
and if the purchase is made in connection with a commercial transaction the contract which gives rise
to the need for the exchange should be exhibited to the seller and if possible a copy filed for future
reference.
Checks or drafts for dollars which the bank or other seller of exchange has reason to believe are
to be used to build up dollar balances for foreigners, should be treated in accordance with the rules
outlined above as the purpose of the President’s proclamation is primarily to prevent a flight of capital
and to preserve the normal balance of exchange transactions.
We ask, however, that you exercise care in obtaining foreign exchange certificates when required,
so as not to alarm depositors in banks in this country as to their ability to withdraw their accounts at
will. It is our desire to make the enforcement of the existing exchange regulations as free from incon­
venience as possible.*
Yours very truly,

*The word person as used in this circular refers to any individual, partnership, association or corporation, includ­
ing all banking institutions.