The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF CHICAGO GOVERNMENT BOND DEPARTMENT ROOM 361 - 209 So. LA SALLE STREET D . A. JONES , A•aT , CAaH IEfll: A.H . v o • T . AS S T . CA SHIE R ADDRESS ALL COMMU"41CATIONS R~LATIVE TO GOVERNMENT BONO S P. 0. BOX 80!5 January 24, 1919 . Circular No . 143 . TO THE BANK OR TRUST COMPANY ADDRESSED: It has been our practice to permit the banks of this Federal Reserve District to forward payments on Liberty Loan subscriptions at the close of business on the date such payments were due instead of forwarding them to reach us on the payment date as required by Treasury Department regulations. This has been done to enable the banks to determine the amount of bonds on whi ch it was necessary for them to make payment in full. It develops that many of the banks holding certificates of indeb tedness applicable to such bond payments have been forwarding them to us for collection and credit and have made their bond payments by check or credit in War Loan Deposit Account . Und er this procedure it is necessary for us to charge the Trea surer' s accou~t for the certificate s at their maturity, while the offsetting credit , i . e., Liberty Loan payments, are not received by us until the follo win g day , and in mo st ca ses too late for cl earings. Thus the credit doe s not go through until the second day after the debit .• This invariably re sult s in a large overdraft in the Tr easurer's account on our books . fo r example, on January 16 the bond payment due in thia District amounted to approximately $55 , 000 , 000 , ani there was outstanding the same amount in certificat es of indebte dness due on that date , which , theoret ically , shoul d offset each other . Fcwever , this was not the case as on January 16 , $41,000,000 of these certificates were presented f or ordinary redemption, while no bond payments were received by us until January 17 . In order for us to continue the practice of allowing banks to forward their payment at the close of business on the payment date, it is absolutely necessary that tho se banks having certificate s of indebtedness maturing on such date, use them in making their bond payments . fn making such payment the certificate s mus t not be forwarded for redemption and a draft drawn against the proceeds but the certificates , themselves , must be sent in with the payment letter. Continued abuse of our pr esent method of ha~dling these ?ayments will make it necessary for us to insi s t that Liberty Loan bond payments reach us on the date set for such payments in the Treasury Depart ment circular ( ffering bonds for subscription . We sincerely trus t this will not be nec essary and hope we may have your cooperation . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FEDERAL RESERVE BANK OF CHICAGO Government Bond Department .
@FedFRASER