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FEDERAL RESERVE BANK OF DALLAS
FISCAL. A G E N T O F TH E U N ITE D S T A T E S

Dallas, Texas, August 26, 1943

PROCEDURE RELATING TO ALLOTMENT OF 2% DEPOSITARY BONDS, SECOND SERIES,
TO QUALIFIED DEPOSITARIES FOR THE RECEIPT OF WITHHELD TAXES

To All Banking Institutions
in the Eleventh Federal Reserve District:

Reference is made to section 8 of Treasury Department Circular No. 714 concerning the
methods for offsetting costs incurred by depositaries for withheld taxes in performing their func­
tion under the circular by the purchase of 2% Depositary Bonds, Second Series, as described in
Department Circular No. 660, First Supplement.
Under the provisions of Circular No. 714, a depositary for withheld taxes may select one of
two alternative methods for the purchase of depositary bonds. Under one method, the depositary
is permitted to purchase such bonds with its own funds. Under the other method, the Treasury will
place with the depositary a balance to the credit of the Treasurer of the United States, provided
that such balance will be used to purchase an equal amount of 2% Depositary Bonds, Second Series.
It will be observed from the tables comprising Exhibit C of Circular No. 714 that a depositary elect­
ing to purchase bonds with its own funds will be permitted to purchase twice the amount that it
would be allowed to purchase if it elected to accept a Treasury balance.
Each depositary must furnish this bank or appropriate branch with a subscription for the 2%
Depositary Bonds, Second Series, which it may be entitled to purchase under the terms of Circular
No. 714. Such subscription shall be made on Treasury Form No. 418, a copy of which is enclosed.
This form makes provision for the method of payment to be used by the depositary in purchasing
the bonds. The subscription on Form No. 418 should, if possible, be submitted to this bank or branch
before the close of the month indicated by you as the period for the determination of the allotment
of bonds which you are initially entitled to purchase. Telegraphic advice of subscriptions will be
accepted but must be confirmed by the depositary on Form No. 418. The subscription and specified
method of payment will remain in effect as long as the depositary is qualified to accept payments of
withheld taxes, unless the depositary, in the interim, submits to this bank or branch a new subscrip­
tion on Form No. 418 indicating a desire to change the method of payment. Appropriate adjustment
in bond allotment or Treasury balance will be considered periodically on the basis of fluctuations in
the volume of business transacted. The first of such adjustments will be made at the close of the
3-month period of operation after initial allotment of bonds or Treasury balance is established and
will be based on the average monthly business transacted during the period under review in relation
to allotment or Treasury balance then in effect. Thereafter adjustments will be made at the close of
each 6-month period ending on December 31 and June 30. However, a change in the election of the
depositary to purchase bonds with its own funds or to take a Treasury balance for the purchase of
bonds, is permissible under the terms of Circular No. 714 only on the adjustment dates, December
31 and June 30 of each year.
In determining the amount of the allotment of 2% Depositary Bonds, Second Series, to which
depositaries are initially entitled, the computation will be governed by the dates the remittances of
withheld taxes are received by this bank or branch. However, depositaries will be allowed the priv­
ilege of deciding, and should so indicate on Form No. 418, whether the initial determination of the

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amount of bonds allotted should be based upon the business transacted during the month in which
it was qualified or upon the business transacted during the month immediately succeeding that in
which the depositary qualified. For instance, some depositaries which were qualified early in August,
1943, will have transacted substantially a full month’s business and hence might prefer to have their
initial allotment of bonds based upon business transacted during that month in order to have the
bonds issued after the close of August rather than after the close of September. Each depositary
should make its final remittance of withheld taxes during the month to be used as the period for the
initial determination, in sufficient time for such remittance to be received by this bank or branch on
di* before the last business day of such month. It is of particular importance that this be done in the
case of a depositary which may not receive payments of withheld taxes aggregating $5,000 or more
in its first month of operation, and hence under the circular would not be required to remit such pay­
ments to this bank or branch until the first business day of the succeeding month.
Upon receipt of the enclosed form No. 418, properly executed, this bank or branch will compute
the initial allotment of 2 % Depositary Bonds, Second Series, that the depositary may be allowed to
purchase under the method selected and based on transactions for the month indicated in the form
by the depositary. The bonds will be issued in the name of the Federal Reserve Bank of Dallas, as
fiscal agent of the United States, and will be held in safekeeping by this bank or branch in trust for
the depositary, as required by Circular No. 714. Bonds purchased with funds deposited by the Treas­
ury for that purpose will be issued in like manner and will be held as collateral security for such
deposit.
Those banks which elect to take a Treasury balance should carry the deposit balance in an
account entitled, ‘‘Federal Reserve Bank of Dallas, Fiscal Agent of the United States, for account of
the Treasurer of the United States— Time Deposit.” Such deposit balance does not constitute a
demand deposit, but is a time deposit subject to withdrawal upon thirty days’ notice of the Secre­
tary of the Treasury given through this bank or branch. At the close of each month a statement
must be submitted to this bank or branch by such bank confirming the amount of the balance in the
account.
Interest checks will be issued by this bank or branch, on semiannual interest payment dates, to
the owners of depositary bonds as provided in Circular No. 660, First Supplement. Generally, one
bond will be issued to depositaries for the full amount allotted; however, in case several bonds are
issued to the same depositary between two interest payment dates, with different issue dates, the
interest due on the first semiannual interest payment date will accrue from the issue date of each
bond.
While this circular is of particular interest to banks which have qualified as depositaries to
receive payments of withheld taxes, it is also being transmitted to all banking institutions in the
Eleventh Federal Reserve District for their information.
Yours very truly,
R. R. GILBERT
President

Form No. 418
TREASURY DEPARTMENT
Fiscal Service
Bureau o f Accounts

Subscription for 2 Percent Depositary Bonds, Second Series
(Date)

TO FEDERAL RESERVE BANK OF DALLAS (or branch)
Fiscal agent of the United States

Pursuant to the provisions of resolution Authorizing Execution of Application-Agreement,
Depositary for Withheld Taxes (Treasury Form 411-A), the undersigned depositary subscribes and
agrees to make payment for 2 percent Depositary Bonds, Second Series, which may be allotted from
time to time for purchase by the depositary under the provisions of Section 8 of Treasury Depart­
ment Circular No. 714. For determining the amount of such bonds which the undersigned deposi­
tary may be initially or periodically entitled to purchase, and for effecting payment for the bonds
allotted for purchase, the method indicated below1 is selected:
TWO PERCENT DEPOSITARY BONDS, SECOND SERIES, TO BE PURCHASED WITH
THE DEPOSITARY’S OWN FUNDS

□

The Federal Reserve Bank as Fiscal Agent of the United States shall compute the allotment
of 2 percent Depositary Bonds, Second Series, on the basis of Table I incorporated in Treasury
Department Circular No. 714 as Exhibit C2 and the Federal Reserve Bank is authorized to
,
effect payment for the bonds thus allotted by charging the___:______________________ 3 account
of this depositary.

□

The Federal Reserve Bank as Fiscal Agent of the United States shall compute the allotment
of 2 percent Depositary Bonds, Second Series, on the basis of Table I incorporated in Treasury
Department Circular No. 714 as Exhibit C2 and this depositary will make payment for the
bonds thus allotted by remittance of the purchase price upon advice from the Federal Reserve
Bank as to the amount of the approved allotment.
BALANCE TO THE CREDIT OF THE TREASURER OF THE UNITED STATES TO BE
PLACED WITH THE DEPOSITARY TO BE USED FOR THE PURCHASE OF AN
EQUAL AMOUNT OF 2 PERCENT DEPOSITARY BONDS, SECOND SERIES

□

A balance to the credit of the “Federal Reserve Bank of Dallas, Fiscal Agent of the United
States, for account of the Treasurer of the United States— Time Deposit” shall be deposited
with this depositary. The amount of such balance will be computed by the Federal Reserve
Bank as Fiscal Agent of the United States on the basis of Table II incorporated in Treasury
Department Circular No. 714 as Exhibit C2 The Federal Reserve Bank is authorized, in lieu of
.
remitting the amount of such authorized balance to this depositary or crediting the account
of this depositary for the amounts thereof, to apply such amount to the purchase of an equal
amount of 2 percent Depositary Bonds, Second Series, for account of this depositary.

The initial allotment of 2 percent Depositary Bonds, Second Series, is to be computed by the
Federal Reserve Bank, as Fiscal Agent of the United States, on the basis of the transactions of this
depositary for the month of- - _____
It is agreed that payment for all 2 percent
Depositary Bonds, Second Series, purchased by the undersigned depositary shall be made on the
tenth day following the end of the month referred to above, and that such bonds shall be issued as
of such date, or as of such later date as payment for the bonds is received by the Federal Reserve
Bank for credit in the general account of the Treasurer of the United States. All 2 percent depos­
itary bonds purchased on subsequent adjustment dates as provided in Treasury Circular No. 714,
as amended, shall be handled in like manner.
This subscription for 2 percent Depositary Bonds, Second Series, and selected method of allot­
ment and payment thereof shall remain in effect as long as the undersigned depositary is qualified
as a depositary for withheld taxes unless new form of subscription in substitution thereof is sub­
mitted to the Federal Reserve Bank in time to be effective on the regular adjustment dates of
December 31 and June 30 prescribed by Treasury Department Circular No. 714.

(Name and location of depositary)

By:

(Name and title)4

1— One of the three alternative methods shown should be selected by placing a check in the appropriate square.
2— Allotments of depositary bonds will be computed by the Federal Reserve Bank on the basis of the amount of
remittances received by the Federal Reserve Bank and number of items related to such remittances.
3— Insert name of account, for example “ Reserve” account.
4— The officer subscribing on behalf of the depositary shall be one designated in the resolution (Form 411-A) men­
tioned above.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102