Full text of Federal Reserve Bank of New York Circulars : 5154. Deposits of March Tax Collections in Treasury Tax and Loan Accounts

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FED E R AL RE SE R VE BANK
OF NEW YORK
Fiscal Agent of the United States

r Circular No. 5154 1
L February 16, 1962 J

Deposits of March Tax Collections in Treasury Tax
and Loan Accounts

To A ll Treasury Tax and Loan Depositaries
in the Second Federal Reserve D istrict:

The Treasury Department has advised us that Directors of Internal Revenue
will be instructed to make special deposits with Federal Reserve Banks, during the
period March 1 through March 30, 1962, of checks of $10,000 or more, representing
payments of corporation income taxes due March 15, 1962. Drawee banks qualified
as Special Depositaries of Public Moneys may receive up to 50 per cent of the amount
of these remittances for deposit in Treasury Tax and Loan Accounts, subject, how­
ever, to the condition that the Treasury may find it necessary to increase or decrease
the percentage amount of the checks for 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 of the United States with Federal Reserve Banks.
W e will prepare daily a special form of cash letter, with an attached certificate
form, for 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 for up to
50 per cent of the amount of those checks eligible for credit to Treasury Tax and
Loan Accounts or for such other percentage as the Treasury may subsequently
specify. Special depositaries wishing to accept for 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 for customers’ tax checks arising
out of sales to the depositaries of customers’ tax anticipation Treasury bills maturing
March 23, 1962. As 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 for cash redemption in advance of the availability of Treasury receipts
from the income tax installment due on the 15th of the month and make it more difficult
for 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.