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Fed er al

reserve

bank

of

Dallas

DALLAS, TEXAS

May 4, 1961

RESERVES OF MEMBER BANKS
(Revision of Bulletin No. 4 and Supplement)

To the Member Banks of the
Eleventh Federal Reserve District:

There is attached a revision dated May 4, 1961, of Bulletin No. 4
of the Federal Reserve Bank of Dallas entitled “ Reserves of Member
Banks.” This supersedes our Bulletin No. 4 entitled “ Reports of
Deposits” dated December 1, 1959. Accompanying this revised bulletin
is a new 1961 Supplement to Bulletin No. 4, “ Schedule of Biweekly
Reserve Computation Periods Ending in the Year 1961.” Please sub­
stitute the new Bulletin and Supplement for the corresponding Bulletin
and Supplement bearing the date of December 1, 1959, now on file in
your ring binder of Regulations of the Board of Governors of the
Federal Reserve System and Bulletins of the Federal Reserve Bank of
Dallas. Please destroy the superseded Bulletin and Supplement.
This revision of Bulletin No. 4 should not change your usual
procedure in the compilation of the Report of Deposits and Related
Data which you send to us each week. There have been some editorial
changes intended principally to clarify and simplify the subject matter.
In addition, the item numbers in the parenthetical references to the
call reports of condition have been changed in the formula (Form
F.R. 414) for “ Computation of Reserve To Be Carried with the
Federal Reserve Bank by Member Banks” on page 4 of Bulletin No. 4.
These last mentioned changes have been made in order to bring the
references in the formula on page 4 into conformity with the recently
revised call reports of condition in which changes were made requiring
the renumbering of items in Schedule D, “ Cash, Balances with Other
Banks, and Cash Items in Process of Collection,” and Schedule E,
“ Demand Deposits.”

(OVER)

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

Later on these changes in references to the call reports of condition
will be incorporated in the form of Report of Deposits and Related
Data (AC-8 for reserve city banks, and AC-62 A3 for nonreserve city
banks), and a supply of the appropriate revised form will be furnished
you. However, until present supplies are exhausted, it will be appre­
ciated if you will use the existing forms, bearing in mind that the refer­
ences thereon to the Report of Condition pertain to the form of report
used by you prior to the April 12, 1961 call. The formula on page 4
of the attached revised Bulletin No. 4 carries the correct references to
the call reports of condition currently in use.
Yours very truly,
Watrous H. Irons
President

Enclosures

BULLETIN NO. 4
May 4, 1961

FED ERAL RESERVE BANK
OF DALLAS

(Superseding Bulletin No. 4,
dated December 1, 19S9)

RESERVES OF MEMBER BANKS

To the Member Banks of the
Eleventh Federal Reserve District:

Unless otherwise stated, all references to the Federal Reserve Bank of
Dallas include the head office and all of its branches.
Under Section 19 of the Federal Reserve Act, as amended, every member
bank is required to establish and maintain a reserve balance as prescribed by
the Board of Governors of the Federal Reserve System within the limitations
set forth in the section mentioned. The percentages applicable to the various
classes of banks will be found in the current Supplement to Regulation D
issued by the Board of Governors of the Federal Reserve System which also
includes current instructions regarding the counting of currency and coin in
partial compliance with reserve requirements.
DEFINITIONS

For the determination of the reserve status of member banks, the Board
of Governors of the Federal Reserve System defines the various classes of
deposits, as well as currency and coin and “ countable” currency and coin. The
Board’s definitions will be found in Section 204.1 of Regulation D.
REPORTS OF DEPOSITS AND RELATED DATA

At the close of business on each Wednesday, each member bank should
send to the Federal Reserve Bank a report of deposits and related data on forms
to be furnished. At the close of the reserve computation period (every Wednes­
day for reserve city banks and every other Wednesday for nonreserve city
banks), these reports will be used in determining whether reserves have been
maintained as required by law. (See Schedule of Biweekly Reserve Computa­
tion Periods which is issued each year as a supplement to this Bulletin.)
It is important that the completed reports be sent to the Federal Reserve
Bank as quickly as possible. In many instances early receipt of a report makes
it possible to advise a member bank how it may offset a deficiency, under certain
circumstances, with a minimum of inconvenience. Since as noted below the
balances for a given day are the balances at the opening of business, it should
be possible to send the report each Wednesday evening, even though the practice
of “ delayed posting” is followed. The cooperation of member banks in sending
the reports each Wednesday evening will be greatly appreciated.

—

2

—

BULLETIN NO. 4

Amounts reported for each date on the report of deposits and related data,
including amounts reported as currency and coin, should be the balances at the
OPENING of business on that date. Accordingly, balances for Sunday and
Monday will be identical and will be those at the close of business on Saturday.
If Saturday is a nonbusiness day, balances for Saturday, Sunday, and Monday
will be identical and will be those at the close of Friday. Balances reported for
a holiday will be those at the close of the preceding business day, and they will
be repeated for the next business day. The amount of the reserve balance
maintained at the Federal Reserve Bank is computed at the close of business
each business day and repeated for each next subsequent nonbusiness day.
It will be observed that at the top of each column of the form provided
for reporting deposits and related data, there is inserted a reference to the
corresponding items and schedules in the call reports of condition. It is believed
that the use of these references will assist you in the proper preparation of
your reports. It should be noted that the figures for U. S. Government demand
deposits (column 2) should include balances in the Treasury Tax and Loan
account and the Series E Bond account, as well as all demand deposits of public
moneys made by or for the account of the United States or some department,
bureau, or official thereof. Amounts reportable as currency and coin (column
8) should include currency and coin in transit to and from the Federal Reserve
Bank. For complete definitions of U. S. Government demand deposits and of
currency and coin, attention is directed to the instructions for preparation of
reports of condition issued by the banking supervisory authorities.
CO M PUTATION OF RESERVES

A formula is provided on page 4 of this bulletin as a guide to use in the
determination of the amount of reserves required. Each member bank is urged
to make its own computation of reserves required and maintained so as to keep
in close touch with its reserve position on a current basis. It will be noted that
the report form for nonreserve city banks provides a copy for the reporting
bank’s file showing all of the deposit and other figures which are reported. It is
hoped that this copy, together with the formula mentioned and the explanation
in the following paragraph, will aid member banks in making their own reserve
computations. (If they care to do so, reserve city banks may make a copy of
the report for their files using an additional form.)
As indicated by parenthetical references, the various items in the formula
on page 4 of this bulletin correspond to certain items and schedules in the call
reports of condition. Gross demand deposits are to be divided into (a) demand
deposits of banks, (b) U. S. Government demand deposits, and (c) other
demand deposits, and should include all of the demand deposit liabilities that
would be shown in Schedule E of the call reports of condition.
Attention is directed to the provisions of Section 204.3(a)(2) of Regula­
tion D with respect to computation periods that end with a nonbusiness day,
or two or more consecutive nonbusiness days, of a member bank or its Federal
Reserve Bank. In such cases the nonbusiness day or days, at the option of the
member bank, may be included in the next reserve computation period. This will
not change the usual reporting procedure; however, the member bank should
advise this bank as soon as possible of its option to transfer the nonbusiness
day, or days, to the following reserve computation period.

BULLETIN NO. 4

3

PENALTIES FOR DEFICIENCIES IN RESERVES

As provided in Section 204.3(a) (1) of Regulation D, deficiencies in reserve
balances will be computed on the basis of average daily net deposit balances and
average daily countable currency and coin during the reserve computation
period.
A member bank will be notified of any deficiency that may have occurred
in its reserve account. Penalties for deficiencies will be assessed monthly on the
basis of average daily deficiencies during any reserve computation period ending
in the preceding calendar month.
The penalty for deficiencies in reserves has been fixed by the Board of
Governors of the Federal Reserve System at a rate 2 per cent per annum above
the Reserve Bank rate applicable to discounts of 90-day commercial paper for
member banks, in effect on the first day of the calendar month in which the
computation period ends.
W A IV E R OF PENALTIES

The Board of Governors has given the Federal Reserve Banks authority,
in their discretion, to waive the assessment of penalties for deficiencies in the
reserves of member banks in the following circumstances:
When a member bank is deficient in reserves during any reserve
computation period, the penalty for the deficiency may be waived
to the extent that the deficiency is offset by excess reserves during
the immediately following reserve computation period, provided
that such deficiency does not exceed 2 per cent of the member
bank’s required reserve.
This rule was adopted with the definite objective of reducing the number
of occasions on which member banks might otherwise incur deficient reserve
penalties. However, the law contemplates that member banks should make
reasonable efforts to hold and maintain the prescribed reserve balances from
day to day, making allowance for unforeseen fluctuations in deposits and re­
serves, even though penalties are assessed on daily average deficiencies over
prescribed periods.
The right is reserved to withdraw, add to, or amend at any time, any of
the provisions of this bulletin.
Yours very truly,
Watrous H. Irons
President

FOR THE FORMULA FOR “ COMPUTATION OF RESERVE TO BE
CARRIED W ITH THE FEDERAL RESERVE BANK BY MEMBER
BANKS” SEE THE FOLLOWING PAGE.

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4

BULLETIN NO. 4

—

Form F. R. 414
(Rev. 4*61)

Form approved
Budget Bureau No. 55-R159.4

CO M PUTATION OF RESERVE T O BE CARRIED W IT H TH E
FED ERAL RESERVE B AN K B Y M EM BER BANKS

(For definitions of the terms gross demand deposits, deductions allowed in computing
reserves, cash items in process of collection, net demand deposits, time deposits, and
currency and coin, see Regulation D of the Board of Governors of the Federal Reserve
System.)
1. GROSS DEMAND DEPOSITS:
(a) Demand deposits of banks1 (opening of business) (Corresponds to items 6 and 7 in Schedule E of call reports of condition)
(b) U. S. Government demand deposits*2 (opening of business)
- (Corresponds to item 4 in Schedule E of call reports of condition)

-

$..............
-

..............

(c) Other demand deposits (opening of business) ___ _ . .
(Corresponds to items 1, 2, 5, and 8 in Schedule E of call reports of condition)
2. DEDUCTIONS ALLOWED IN COMPUTING RESERVES:
(a) Cash items in process of collection, except to the extent included in item 2(b)
(including checks with Federal Reserve Banks in process of collection and
checks on hand which will be presented for payment or forwarded for collec­
tion on the following business day) (opening of business) (Corresponds to item 1 in Schedule D of call reports of condition)
(b) Balances subject to immediate withdrawal due from other banks (including
cash items forwarded to a correspondent bank for collection and credit and
charged to “ Due from banks/' but excluding balances due from Federal Re­
serve Banks, from foreign banks or branches thereof, from foreign branches
of domestic banks, or from private banks)1 (opening of business)
(Corresponds to item 2 in Schedule D of call reports of condition)

_______

________

3. NET DEMAND DEPOSITS (item 1 minus item 2 ) ......................................................................
4. TIME DEPOSITS (opening of business)
­
(See Schedule F of call reports of condition for items constituting time deposits)
5. RESERVE REQUIRED3:
(a) On net demand deposits (item 3 above):
Banks in central reserve cities, _____ per cent Banks in reserve cities, _____ per cent Banks located elsewhere, _____ per cent -

-

(b) On time deposits (item 4 above): ..........per cent (c)

Total required reserves to be maintained -

-

-

-

-

-

-

-

-

6.

Currency and Coin (opening of business) - - - - (Corresponds to item 5 in Schedule D of call reports of condition)

7.

Reserves to be maintained with Federal Reserve Bank (Item 5(c) minus item 6)

-

-

­
­

-

­
-

­
-

-

­

R eciprocal interbank demand deposits with banks in the United States, except private banks and A m erican
branches o f foreign banks, must be reported net.

includes balances in Treasury tax and loan account and Series E bond account.
3For current required reserve percentages, see latest supplement to Regulation D.

FED ERAL RESERVE BAN K
O F DALLAS

1 9 61 SUPPLEMENT TO BULLETIN NO. 4

SCHEDULE OF BIWEEKLY RESERVE COMPUTATION PERIODS
ENDING IN THE YEAR 1961
Period Begins with*

Period Ends with*

December 29, 1960
January 12, 1961
January 26, 1961
February 9, 1961
February 23, 1961
March 9, 1961
March 23, 1961
April 6, 1961
April 20, 1961
May 4, 1961
May 18, 1961
June 1, 1961
June 15,1961
June 29, 1961
July 13, 1961
July 27, 1961
August 10, 1961
August 24, 1961
September 7, 1961
September 21, 1961
October 5, 1961
October 19, 1961
November 2, 1961
November 16, 1961
November 30, 1961
December 14, 1961

January 11, 1961
January 25, 1961
February 8, 1961
February 22, 1961
March 8, 1961
March 22, 1961
April 5, 1961
April 19, 1961
May 3, 1961
May 17, 1961
May 31, 1961
June 14, 1961
June 28, 1961
July 12, 1961
July 26, 1961
August 9, 1961
August 23, 1961
September 6, 1961
September 20, 1961
October 4, 1961
October 18, 1961
November 1, 1961
November IS, 1961
November 29, 1961
December 13,1961
December 27,1961

*The periods include both the beginning and ending date.

Note: It will be appreciated if nonreserve city member banks will observe
the foregoing schedule in preparing their reports of deposits for reserve
computation purposes. As explained in Bulletin No. 4, “ Reserves of
Member Banks,” a report of deposits should be mailed each Wednesday
for the weekly period ended on that date although computation of your
reserve requirements will be based on your reports covering the full twoweek periods indicated in the above schedule.