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Circular No. 11. Series of 1918 O F F IC E R S D IR E C T O R S R. L . V A N Z A N D T . Governor W . F . R A M S E Y . C h a ir m a n a n d Feder al. Re s e r v e Ao e n t W . e. N E W S O M E , . D e p u t y C h a i r m a n J. J C U L B E R T S O N , . . P a r is . T e x a s F R A N K K E L L . . W IC H IT A FA LLS . TE X A S B . A M C K IN N E Y , . . D U R A N T, O K I.A . M A R IO N S A N S O M , . F T W O R TH . TE X A S JN O . T . S C O T- , . H o u s to n . T exas E . K . S M IT H . S H R EV FP O R T, L a . H. O. W O O TEN . . A b il e n e , T e x a s J. W . H OOPES, De p u t y G o v e r n o r L Y N N P. T A L L E Y . Ca s h ie r SA M R. L A W D E R , A s s is t a n t C a s h ie r R. R. G IL B E R T . A s s is t a n t C a s h ie r R. B. C O LEM A N . A c t in g a s s is t a n t C a s h ie r Federal Reserve Bank OF DALLAS C H A R L E S C . H A L L . A S SIS TA N T Federal reserve Agen t w . C . W E IS S .................................... A U D ITO R M arch 8, 1918. “FOREWARNED IS FOREARMED!” T O T H E BA N K A D D R E S S E D : On June 15th next the banks of this district will be called upon to pay to the U nited States Internal Reve nue D epartm ent several million dollars on account of incom e and excess profits taxes due by their custom ers and by them selves. Y our custom ers will prepare them selves to m eet these taxes in one or more of the three following w ays: (a) T hey will keep on deposit until that date funds which they now have w ith you. (b) T hey will accum ulate w ith you betw een now and th at date the necessary am ount, or (c) T hey will borrow from you when the tim e comes to make the paym ent. In any event you will be called upon for funds w ith which to m ake the actual paym ent and, as the same condition will exist to a greater or less degree in every bank throughout the U nited States, it is incum bent upon you to prepare yourself as fully as possible in order th a t there m ay be a minim um of disturbance to your own and the nation’s financial condition. T he Secretary of the T reasury has provided the banks and their custom ers w ith an effective m eans of re ducing this disturbance in his offering of T reasury Certificates of Indebtedness, now on sale, bearing interest at the rate of 4% per annum , which will m ature on June 25, 1918, but which will be received by all Internal Revenue Collectors at par and accrued interest on June 15, 1918, when offered in paym ent of the income or excess profits taxes due on th at date. W hile m any of the larger tax-payers have purchased and are purchasing these Certificates of Indebtedness for the purpose for which they were issued, a very m uch larger percentage are not m aking such purchases, either because they have not the idle funds or because they intend to borrow from you, and you will also be required to take care of tho$e paym ents which individually are small, but which in the aggregate will am ount to a considerable sum. In order to further assist the banks of this district in safeguarding the financial situation we have obtained a ruling from the Secretary of the T reasury w hereby a bank m ay accum ulate and use these Certificates of Indebt edness in paying the income and excess profits taxes of its custom ers. This ruling is announced in his letter to me of February 27 , 1918, one paragraph of which reads as follows: “With respect to the inquiry made in your letter of the 9th, you are informed that the Department sees no objection to the practice of banks which hold Certificates of Indebt edness using such certificates in payment of the income or war excess profits taxes of such of their customers as may request them to do so. It will be understood, of course, that the Government will hold tax-payers personally liable for the payment of taxes as sessed against them if such taxes are not paid when due.” Banks, bankers, and others interested m ay obtain these certificates at par and accrued interest from the Federal Reserve Bank of Dallas in accordance w ith the term s set forth in our circular of February 15, 1918, a copy of which was mailed you on that date. Please bear in m ind th at the bank which has not provided itself w ith these certificates m ay find it very incon venient to satisfactorily m eet the w ithdraw als on June 15th next. Yours very truly, Governor. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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