Full text of Federal Reserve Bank of New York Circulars : 5036. Deposits of June Tax Collections in Treasury Tax and Loan Accounts

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FED ERAL R E SE R V E BANK
OF NEW YORK

Fiscal Agent of the United States
r C ircu lar N o . 5 0 3 6 "1
M a y 1 6 , 1961
J

L

Deposits o f June Tax Collections in Treasury Tax and Loan Accounts

T o A ll Treasury Tax and Loan D epositaries
in the Second Federal R eserve D istrict:

The Treasury Department has advised us that Directors o f Internal Revenue will
be instructed to make special deposits with Federal Reserve Banks, during the period
June 1 through June 30, 1961, o f checks o f $10,000 or more, representing payments of
corporation and individual income taxes due June 15, 1961. Drawee banks qualified as
Special Depositaries o f Public Moneys may receive up to 50 per cent of the amount of
these remittances fo r deposit in Treasury Tax and Loan Accounts, subject, however, to
the condition that the Treasury may find it necessary to increase or decrease the per­
centage amount of the checks fo r credit to the Tax and Loan Accounts from time to time
during the period, if such action is required to prevent undue fluctuations in the account of
the Treasurer o f the United States with Federal Reserve Banks.
W e will prepare daily a special form of cash letter, with an attached certificate form,
fo r the tax checks included in the special deposits of the Directors of Internal Revenue
during the period. The amount shown in the certificate will be fo r up to 50 per cent o f the
amount of those checks eligible fo r credit to Treasury Tax and Loan Accounts or fo r such
other percentage as the Treasury may subsequently specify. Special depositaries wishing
to accept fo r deposit in Tax and Loan Accounts the amount shown in the certificate
attached to the cash letter should execute and return the certificate, in accordance with
the instructions contained in the cash letter.
The Treasury will deny credit to depositaries fo r customers’ tax checks arising out
o f sales to the depositaries o f customers’ tax anticipation Treasury bills maturing June
22, 1961. A s the Treasury has in the past stated, it does not look with favor upon such
transactions, inasmuch as they increase the amount of tax anticipation bills presented
fo r cash redemption in advance of the availability o f Treasury receipts from the income
tax installment due on the 15th o f the month and make it more difficult fo r the Treasury
and the Federal Reserve System to handle the large income tax collections during the
month in a manner that will maintain stability in the money market.
Additional copies of this circular will be furnished upon request.




A

lfred

H

ayes,

President.