View PDF

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

FEDERAL RESERVE BANK
OF NEW YORK
Fiscal Agent of the United States
f*Circular No. 2 4 9 6 1
L September 4, 1942 i

DELIVERY OF UNITED STATES WAR SAVINGS BONDS, SERIES E,
AGAINST CHECKS TENDERED IN PAYMENT THEREFOR
To All Issuing Agents in the Second Federal
Reserve District Qualified for Sale of
United States War Savings Bonds, Series E :

This bank has received inquiries from certain issuing agents of United States War Savings
Bonds, Series E, concerning their responsibility as the result of the delivery of bonds by them
against checks which subsequently are returned unpaid. It appears that checks may constitute
a large part of the receipts from sales of bonds by radio stations qualified as issuing agents and
that this may also be true with respect to certain theatres and other agents.
It will be noted that Section 1 of Part III (Purchase of Bonds) of Treasury Circular
No. 653, Revised, authorizes agencies designated and duly qualified as sales agents pursuant to
Treasury Circular No. 657, as amended and supplemented, to sell Series E bonds over-thecounter for cash, and makes no provision for sale of bonds by such agents other than on a cash
basis. In the circumstances, the Treasury Department has requested this bank to advise all
issuing agents in the Second Federal Reserve District as follows, with respect to the delivery
of Series E bonds against checks tendered in payment therefor:
1. It is suggested that each issuing agent establish a waiting period to allow a reasonable time after
deposit of a check before delivery of the bond is effected, to allow for return of the check if it
proves to be uncollectible. Issuing agents should consult their local banks for guidance in establishing an adequate waiting period.
2. In the event a bond is delivered by an agent and the check tendered in payment therefor is subsequently returned unpaid to the agent, a description of the bond and a statement of the facts of the
case should be furnished to the Federal Reserve Bank of New York at once. The agent will be
expected to obtain payment or have the bond returned immediately.
3. If the agent obtains either payment or the return of the bond, appropriate advice should be forwarded to the Federal Reserve Bank of New York promptly. If the agent does not obtain payment
or the return of the bond after two requests therefor, the agent's file or photostatic copy thereof
should be forwarded promptly to the Federal Reserve Bank of New York for further action.
4. Although full cooperation will be given issuing agents, it is not legally possible for the Treasury
to waive any rights it may have to demand reimbursement from issuing agents for any loss which
may result to the Treasury on account of bonds issued and delivered by the agent against a check
which subsequently proves to be uncollectible.

Certain issuing agents qualified by this bank have branches or other outlets in other Federal
Reserve Districts which receive bond stock directly from the Federal Reserve Banks of those
districts, respectively. In the event of the delivery of a bond by such a branch or other outlet
against a check which is subsequently returned unpaid, the communications referred to in the
foregoing instructions should be addressed by such branch or outlet to the Federal Reserve
Bank from which it receives bond stock and not to this bank.
Under no circumstances should issuing agents receive checks payable to the Treasurer of
the United States or to the Federal Reserve Bank of New York in payment for Series E bonds
issued by such agents. Checks so payable may not, of course, be endorsed by an issuing agent
and they will not be received by this bank in remittance for Series E bond stock.
It is expected that issuing agents delivering bonds against checks tendered in payment
therefor will be governed by the foregoing instructions of the Treasury Department.




A L L A N SPROTJL,

President.

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