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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.