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F E D E R A L
O F
R E S E R V E
N E W
B A N K
Y O R K
Fiscal A g e n t of the United States
r Circular Xo. 2 6 1 6 1
L
April 24, 1943
J
WAR
LOAN
DEPOSIT
ACCOUNTS
To all incorporated banks and trust companies
in the Second Federal Reserve District :
Enclosed is a copy of Treasury Department Circular No. 92
(Revised) dated A p r i l 14, 1943, relating to Special Deposits of Public
Moneys under the A c t of Congress approved September 24, 1917, as
amended (Second Liberty Bond Act, as amended).
This circular
regarding W a r Loan Deposit Accounts supersedes the earlier revision
dated February 23, 1932, as amended.
Also enclosed are copies of F o r m H-5, " A p p l i c a t i o n f o r D e p o s i t s , "
and F o r m J-5, " R e s o l u t i o n s Authorizing Application f o r D e p o s i t s , "
revised A p r i l 14, 1943, which are referred to in paragraph 2 of the new
circular. These revised f o r m s should be used by any incorporated
bank or trust company which hereafter applies f o r original designation as a special depositary of public moneys, and by any presently
qualified depositary which applies f o r designation in an increased
amount.
ALLAN
SPROUL,
President.
SPECIAL
DEPOSITS
OF P U B L I C
MONEYS
AS AMENDED.
1943
Department Circular No. 9 2 (Revised)
Fiscal Service—Bureau of Accounts
UNDER
(SECOND
THE
ACT OF C O N G R E S S
LIBERTY
BOND
ACT, A S
TREASURY
APPROVED
SEPTEMBER
24,
1917
AMENDED.)
DEPARTMENT,
OFFICE OF THE
SECRETARY,
Washington, April H, 19US.
To Federal Reserve Banks and other banks and trust companies incorporated under the laws
of the United States or of any State:
Department Circular No. 92 (Revised), dated February 23, 1932, as amended, is revised
to read as follows:
Banks and trust companies designated pursuant to the terms of this circular are given
the title "Special Depositaries of Public Moneys" and are hereinafter referred to as "Special
Depositaries." Special Depositaries are permitted to make payment in the form of a deposit
credit for the purchase price of United States Government obligations purchased by such
banks or trust companies for their own account or for the account of their customers, who
enter their subscriptions through these banks or trust companies, when this method of payment is permitted under the terms of the circulars inviting subscriptions to such issues. The
deposit credits set up under this designation are called "War Loan Deposit Accounts." Under
this arrangement the large sums of money raised by the Treasury through financing operations are left on deposit in local banking institutions until the Treasury needs to withdraw
them to meet Government expenditures thus avoiding the dislocations in the banking system which might result from immediate withdrawal of such funds. Pursuant to recent
amendments to the Federal Reserve Act, these deposit accounts will, for the duration of the
War and for six months after the cessation of hostilities, be exempt from insurance assessments of the Federal Deposit Insurance Corporation and from the reserve requirements of
the Federal Reserve System.
G E N E R A L PROVISIONS
1. Any incorporated bank or trust company in one of the States of the United States or
in the District of Columbia desiring to participate in deposits of public moneys, as authorized
by the Act of Congress approved September 24, 1917, as amended (Second Liberty Bond Act,
As Amended), hereinafter referred to as the Act, should make application to the Federal
Reserve Bank of its district.
2. Application for deposit of public moneys under the Act must be in Form H-5, hereto
attached, and must be accompanied by a certified copy of a resolution, duly adopted by the
Board of Directors of the applicant, in Form J-5, hereto attached.
3. Depositaries already qualified to a sufficient amount pursuant to Department Circular
No. 92 (Revised) dated February 23, 1932, as amended, will not be required to file new formal
applications or resolutions, but they will, by the acceptance or retention of deposits after
April 30, 1943, be conclusively presumed to have assented to all the terms and provisions
hereof, and to the retention of collateral security theretofore pledged as collateral security
hereunder.
4. A Special Depositary, heretofore or hereafter designated, which having subscribed to
an offering of United States bonds, notes, certificates of indebtedness, or Treasury Bills and
having in due course received an allotment on its subscription, refuses to receive the said
allotment and to make payment therefor, may be discontinued. A Special Depositary discontinued for any reason may be redesignated upon full compliance with the terms of this
circular, upon recommendation of the Federal Reserve Bank of its district, and upon the
approval of the Secretary of the Treasury.
5. In fixing the maximum amount of deposits for which it will apply, the applicant bank
or trust company should be guided by the amount of the payments which it expects to make,
on subscriptions made by or through it for bonds, notes, certificates of indebtedness, and
Treasury Bills of the United States issued under authority of the Act, and, as well by any
statutory limitations upon the amount of deposits which the applicant bank or trust company
may receive from any one depositor.
(1)
2
6. The Secretary of the Treasury will designate approved Special Depositaries and
determine the maximum amount of deposits on the basis of recommendations of the Federal
Reserve Banks. Any application may be rejected or the applicant may be designated for a
smaller maximum amount than that for which it applied.
COLLATERAL SECURITY
7. Designated Special Depositaries will be required, before receiving deposits, to qualify
by pledging as collateral security for such deposits, securities of any of the following classes,
to an amount, taken at the rates and conforming to the conditions provided below, at least
equal to such deposits; provided, that no collateral security shall be required for such part of
the deposits as are insured under section 12B of the Federal Reserve Act, as amended:
(a) United States Government Securities.—Transferable bonds, notes, certificates of
indebtedness, and Treasury Bills of the United States Government of any issue, including
interim certificates or receipts for payment therefor, except such securities as by the terms
of their issue are not acceptable as security f o r deposits of public moneys; all at face value.
(b) Obligations Guaranteed by the United States.—Obligations fully and unconditionally guaranteed by the United States both as to principal and interest; all at face value.
(c) Obligations of Government Agencies, Etc.—Obligations of the Federal Land Banks,
Federal Intel-mediate Credit Banks, Federal Home Loan Banks, the Federal National Mortgage Association, and obligations of Public Housing Agencies (as defined in the United States
Housing Act of 1937, As Amended) when secured to the full amount thereof by a Requisition Agreement with the Federal Public Housing Authority; all at face value.
(d) Insular and Territorial Government Securities.—Bonds of Puerto Rico, bonds and
certificates of indebtedness of the Philippine Islands, and bonds of the Territory of Hawaii,
all at market value, not to exceed face value.
(e) State Bonds.—Bonds of any State of the United States, at market value, not to
exceed face value.
( / ) State Notes, Certificates of Indebtedness, and Warrants.—Approved notes, certificates of indebtedness, and warrants issued by any State of the United States; at 90 percent
of market value, not to exceed face value.
(g) County and Municipal Securities.—Approved bonds of any county, city, or other
political subdivision in the United States; and approved notes, certificates of indebtedness,
and warrants with a fixed maturity issued by any county or city in the United States, which
are direct obligations of the county or city as a whole, or which are payable from general
taxes levied on all taxable property in such county or city; provided the obligations meet the
requirements of the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System and the Federal Deposit Insurance Corporation f o r classification by bank
examiners under Group I, as follows:
Group I securities are marketable obligations in which the investment characteristics
are not distinctly or predominantly speculative. This group includes general market obligations in the four highest grades and unrated securities of equivalent value.
Obligations of counties, cities, and other political subdivisions, rated in one of the three highest grades by a recognized investment service organization regularly engaged in the business of rating or grading bonds, may be accepted at 90 percent of market value, not to exceed
face value, and other qualified obligations of counties, cities, and other political subdivisions
may be accepted at 80 percent of market value, not to exceed face value.
(h) Corporate Securities.—Approved bonds, notes, and other obligations of domestic
corporations, provided they meet the requirements f o r classification under Group I as defined
in subparagraph g—"County and Municipal Securities"—at 80 percent of market value, not
to exceed face value.
(i) Commercial and Agricultural Paper and Bankers* Acceptances.—Commercial and
agricultural paper and bankers' acceptances having a maturity at the time of pledge of not to
exceed six months, and notes of correspondent incorporated banks or trust companies secured
by such commercial or agricultural paper or bankers' acceptances, all of which are approved
by the Federal Reserve Bank of the district in which the depositary is located; at 80 percent
of face value.
8. The Secretary of the Treasury reserves the right to require all or any stated percentage of deposits received by any bank pursuant to the provisions of this circular and not insured under section 12B of the Federal Reserve Act, as amended, to be secured by pledge of
United States Government securities or obligations guaranteed by the United States as defined in subparagraphs 7(a) and 7 ( 6 ) above.
3
9. The stipulations as to the rates at which collateral may be accepted hereunder are
intended to indicate maximum values only and the right is expressly reserved to call for or
require additional collateral security at any time.
10. The approval and valuation of securities is committed to the several Federal Reserve
Banks, acting under the direction of the Secretary of the Treasury. The withdrawal of
securities, the pledge of additional securities, and the substitution of securities shall be made
from time to time as required or permitted by the Federal Reserve Banks, acting under like
direction.
CUSTODY OF SECURITIES
11. All securities accepted as collateral security for deposits hereunder must be deposited with the Federal Reserve Bank or branch of the district in which the depositary is located, as fiscal agent of the United States, or by the direction of and subject to the order of
such Federal Preserve Bank or branch, as fiscal agent of the United States, with a custodian or
custodians within the United States designated by such Federal Reserve Bank, and under
such terms and conditions as it may prescribe.
HOW DEPOSITS ARE TO BE MADE
12. Each qualified Special Depositary will be required to open and maintain or continue
for the account of the Federal Reserve Bank of its district, as fiscal agent of the United
States, a separate account for deposits to be made hereunder, to be known as the "War Loan
Deposit Account."
13. Qualified Special Depositaries, if and to the extent from time to time hereafter authorized by the Secretary of the Treasury, may be permitted to make payment by credit, when
due, to a War Loan Deposit Account, of amounts payable on subscriptions made by or
through them for bonds, notes, certificates of indebtedness, and Treasury Bills of the United
States issued under authority of the Act of September 24, 1917, as amended. In order to
make payment by credit to a War Loan Deposit Account, the Special Depositary must, on or
before the date when such payment is due, notify the Federal Reserve Bank of the district of
such intention and issue a certificate of advice to such Federal Reserve Bank, stating that a
sum specified has been deposited with such depositary for the account of such Federal Reserve Bank, as fiscal agent of the United States, in the War Loan Deposit Account. Such certificate of advice will be furnished in the form and manner prescribed by the Federal Reserve
Bank.
14. The amount deposited with any special depositary shall not in the aggregate exceed
at any one time (a) the maximum amount f o r which it shall have been designated as a
depositary, nor (b) the aggregate amount of the collateral security pledged by it taken at
the rates hereinbefore provided, excepting that part of the deposits insured under section
12B of the Federal Reserve Act, as amended.
W I T H D R A W A L OF DEPOSITS
15. All deposits will be payable on demand without previous notice. Calls for withdrawals of deposits with Special Depositaries will be made by direction of the Secretary of
the Treasury through the Federal Reserve Banks, and such depositaries will be required to
arrange for payments of such calls in funds that will be immediately available on the payment due date.
EXEMPTION FROM INSURANCE ASSESSMENTS AND RESERVE REQUIREMENTS
16. The Act of Congress, approved April 13, 1943, contains the following provisions relative to exemption of "War Loan Deposits" from (a) assessments for insurance by the Federal Deposit Insurance Corporation and (6) the reserve requirements of member banks of the
Federal Reserve System:
". . . the second sentence of paragraph (1) of subsection (h) of section 12B of the Federal Reserve Act (U. S. C., title 12, sec. 264 (h) ( 1 ) ) , as amended, is hereby further
amended by substituting a colon for the period at the end thereof and adding the following : 'and provided further, That until 6 months after the cessation of hostilities in the
present war as determined by proclamation of the President or concurrent resolution of
the Congress any balance payable to the United States by any insured bank, whether
represented by a deposit account or otherwise, arising solely as a result of subscriptions
made by or through such insured bank for United States Government securities issued
under authority of the Second Liberty Bond Act, as amended, shall be excluded from the
definition of "deposit" for the purpose of determining the assessment base.'
4
"SEC. 2. T h e last s e n t e n c e o f s e c t i o n 19 o f t h e F e d e r a l R e s e r v e A c t ( U . S. C., title
12, sec. 4 6 2 a - l ) b e a m e n d e d b y s u b s t i t u t i n g a c o l o n f o r t h e p e r i o d a t t h e e n d t h e r e o f
a n d b y a d d i n g t h e f o l l o w i n g : 'Provided,
T h a t until 6 m o n t h s a f t e r t h e c e s s a t i o n o f h o s tilities in t h e p r e s e n t w a r as d e t e r m i n e d b y p r o c l a m a t i o n o f t h e P r e s i d e n t o r c o n c u r r e n t
resolution of the Congress no deposit payable to the United States b y a n y m e m b e r bank
a r i s i n g solely as t h e r e s u l t o f s u b s c r i p t i o n s m a d e b y o r t h r o u g h s u c h m e m b e r b a n k f o r
U n i t e d S t a t e s G o v e r n m e n t s e c u r i t i e s i s s u e d u n d e r a u t h o r i t y o f the S e c o n d L i b e r t y B o n d
A c t , a s a m e n d e d , shall b e s u b j e c t t o t h e r e s e r v e r e q u i r e m e n t s o f t h i s s e c t i o n . ' "
17. T h e r i g h t is r e s e r v e d t o a m e n d o r s u p p l e m e n t o r r e v i s e t h e p r o v i s i o n s o f t h i s c i r c u l a r
at a n y t i m e o r f r o m t i m e to t i m e .
H E N R Y M O R G E N T H A U , JR.,
Secretary
of the
Treasury.
F O R M H - 5 — B U R E A U OF A C C O U N T S .
(Revised April 14, 1943)
APPLICATION FOR DEPOSITS
(City and State)
(Date)
To the Federal Reserve Bank
, fiscal agent of the United States:
The undersigned bank or trust company, in accordance with the provisions of Treasury Department
Circular No. 92 (revised April 14, 1943), and pursuant to due action of its board of directors, hereby makes
application for the deposit of public moneys, with it from time to time under the Act of Congress approved
September 24, 1917, as amended, the aggregate amount of such deposits not to exceed at any one time
$
; and assigns and agrees to pledge, from time to time to and with the Federal Reserve
Bank of
—
, as fiscal agent of the United States, as collateral security for
such deposits as may be made from time to time pursuant to this application, securities of the character
and amount required by said circular.
By
President (Vice
President).
Street
City or town
State
F O R M J - 5 — B U R E A U OF A C C O U N T S .
(Revised April 14, 1943)
RESOLUTIONS AUTHORIZING APPLICATION FOR DEPOSITS
(City and State)
(Date)
I hereby certify that the following resolutions were duly adopted at a meeting of the board of directors
of the below-named bank (trust company), which meeting was duly called and duly held on the
day of
, 194—, a quorum being present, and that the said resolutions were
spread upon the minutes of said meeting:
Resolved, That in accordance with the provisions of Treasury Department Circular No. 92 (revised April
14, 1943), this bank (trust company) makes application for the deposit of public moneys with it from time
to time under the Act of Congress approved September 24, 1917, as amended, the aggregate amount of such
deposits not to exceed at any one time $
; and assigns and agrees to pledge from time to
time to and with the Federal Reserve Bank of
, as fiscal agent of the
United States, as collateral security for such deposits as may be made from time to time, pursuant to such
application, securities of the character and amount required by said circular; and
Resolved, That the president, or any vice president, or cashier, or assistant cashier, or secretary, or
assistant secretary, or treasurer, or assistant treasurer, of the undersigned bank (trust company) is hereby
authorized to make application, assignment, and agreement as aforesaid, and from time to time to deliver
to and pledge with said Federal Reserve Bank, or any custodian or custodians appointed by it, securities of
the undersigned bank (trust company) of a character and amount at least sufficient to secure such deposits
according to the terms of said Treasury Department circular, and from time to time to withdraw securities
and to substitute other securities and to pledge and deposit additional securities.
In witness whereof I have hereunto signed my name and affixed the seal of
(Name of bank)
(City and State)
Cashier
[Filed with the Division of the Federal Register, April 17, 1943]
S. GOVERNMENT PRINTING OFFICE
622362°
{Secretary).
G. D. 6.4—SM—4-43
FORM H-S—BUREAU OF ACCOUNTS.
(Revised April 14, 1943)
APPLICATION FOR DEPOSITS
(City and State)
(Date)
T o the Federal Reserve Bank of New York, fiscal agent of the United States:
The undersigned bank or trust company, in accordance with the provisions of Treasury
Department Circular No. 92 (revised April 14, 1943), and pursuant to due action of its board
of directors, hereby makes application for the deposit of public moneys, with it from time to
time under the Act of Congress approved September 24, 1917, as amended, the aggregate amount
of such deposits not to exceed at any one time $
; and assigns and agrees to
pledge, from time to time to and with the Federal Reserve Bank of New York, as fiscal agent of
the United States, as collateral security f o r such deposits as may be made from time to time
pursuant to this application, securities of the character and amount required by said circular.
By
-
-
President ( Vice President).
Street
City or town
State
FORM
J-5—BUREAU OF ACCOUNTS.
(Revised April 14, 1943)
RESOLUTIONS AUTHORIZING APPLICATION FOR DEPOSITS
(City and State)
(Date)
I hereby certify that the following resolutions were duly adopted at a meeting of the board
of directors of the below-named bank (trust company), which meeting was duly called and duly
held on the
day of
, 194
, a quorum being present,
and that the said resolutions were spread upon the minutes of said meeting:
Resolved, That in accordance with the provisions of Treasury Department Circular No. 92
(revised April 14, 1943), this bank (trust company) makes application for the deposit o f public moneys with it f r o m time to time under the Act of Congress approved September 24, 1917, as
amended, the aggregate amount o f such deposits not to exceed at anyone time $
;
and assigns and agrees to pledge from time to time to and with the Federal Reserve Bank of
New Y o r k , as fiscal agent of the United States, as collateral security for such deposits as may
be made from time to time, pursuant to such application, securities of the character and amount
required by said circular; and
Resolved, That the president, or any vice president, or cashier, or assistant cashier, or
secretary, or assistant secretary, or treasurer, or assistant treasurer, of the undersigned bank
(trust company) is hereby authorized to make application, assignment, and agreement as aforesaid, and from time to time to deliver to and pledge with said Federal Reserve Bank, or any
custodian or custodians appointed by it, securities of the undersigned bank (trust company) of a
character and amount at least sufficient to secure such deposits according to the terms of said
Treasury Department circular, and from time to time to withdraw securities and to substitute
other securities and to pledge and deposit additional securities.
In witness whereof I have hereunto signed my name and a f f i x e d the seal o f
(Name of bank)
(Seal of Applicant)
(City and State)
Cashier (Secretary).
@FedFRASER