Full text of Federal Reserve Bank of New York Circulars : 229. New Method of Reporting Reserves

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

_

CIRCULAR N O . 229
(Supplementing Circular No. 207)

FEDERAL RESERVE BANK
OF N E W YORK
ACCOUNTING D E P A R T M E N T

December 4, 1919.

RESERVES

T o ALL M E M B E R BANKS IN THE SECOND F E D E R A L R E S E R V E

DISTRICT,

DEAR SIRS:

IMPORTANT
In view of an apparent misunderstanding on the part of some of the member banks, the
attention of all is again called to the new method of averaging reserve balances described in our
Circular No. 207 dated September 13, 1919.
The ruling of the Federal Reserve Board provides t h a t beginning October 1, 1919, the
reserves shall be computed as follows:
For banks in reserve and central reserve cities (Boroughs of Manh a t t a n , Brooklyn and Bronx in New York City and in the Cities of Albany
and Buffalo) on the basis of average daily net deposit balances covering a
w e e k l y period.
For banks in all other places on the basis of average daily net deposit
balances covering a s e m i - m o n t h l y period.
In accordance with this ruling member banks are now reporting to us their required reserve weekly or semi-monthly, and we, in turn, are obliged, in comparing these figures with the
reserves maintained on our books, to conside* the reserve balances for each period separately
without regard for the reserve maintained in any other period, and in case of deficiencies in any
period to assess the prescribed penalty for t h a t period alone.
These weekly or semi-monthly periods supersede t h e m o n t h l y period for which reserves
were averaged prior to October 1, 1919, and under the ruling of the Federal Reserve Board an
excess reserve in one part of the month may not be used to offset a deficiency of another part of
the month, b u t each period must be considered separately.
The special attention of all member banks is again called to this important change in the
periods for which the average reserves are computed in order t h a t it m a y be fully understood and
observed.




Yours very truly,
B E N J . STRONG,

Governor.