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r/I S C L .

FEDERAL

RESERVE

\A.

2CM-J0125

BANK

OF DALLAS

C ir c u la r No. 4 1 .

September 2 0 , 1 9 1 6 .
VAULT RESERVES

TO THE MEMBER BANK ADDRESSED:
The re cen t amendments to th e F ederal R eserve Act p r o v id e ,
in p a r t , th a t th e F ed e ra l R eserve Board s h a ll have power.
"By g en era l r u li n g c o v e r in g a l l d i s t r i c t s a l i k e ,
t o perm it member banks to ca rry in th e F ederal Reserve
Banks o f t h e ir r e s p e c t iv e d i s t r i c t s any p o r tio n o f t h e ir
r e s e r v e s now re q u ire d by S e c tio n 19 o f t h i s Act t o be
h e ld in t h e ir own v a u l t s .”
In pursuance o f the a u th o r ity v e ste d in i t by t h i s s e c t io n
th e F ed eral R eserve Board has r u le d t h a t ,
" E f f e c t i v e September 1 8 , 1 9 1 6 , and u n t i l fu r th e r
n o t i c e , any member bank so d e s ir in g s h a l l be p erm itted
to c a rr y in th e Federal R eserve Bank o f i t s d i s t r i c t any
p o r t io n o f i t s r e s e r v e s now re q u ired by law t o be h e ld
i n i t s own v a u l t s . "
E xp erien ce tea ch es each bank the amount o f a c tu a l currency
n ecessa ry f o r i t t o have in i t s own v a u lts to ca re f o r ordinary
t r a n s a c t io n s , and t h i s amendment to the Act and th e r u lin g of the
F ed eral R eserve Board should be p a r t i c u la r ly welcome to th e member
banks o f t h i s d i s t r i c t , as by i t they may r e l i e v e them selves o f c o n s id e r a b le r e s p o n s i b i l i t y and s t i l l have t h e i r r e se r v e where i t
can be im m ediately shipped to them, in any form o f currency d e s ir e d .
I f they d e s ir e to do s o , our member banks may th e r e fo r e
in c re a se the r e s e r v e they are ca rr y in g w ith ua and corresp on d in gly
reduce th e amount th ey are now re q u ired by law to carry in t h e ir own
v a u lts .
R e s p e c t f u lly ,

R . L. VAN ZANDT,

Governor

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