Full text of Federal Reserve Bank of New York Circulars : 5337. Deposits of June Tax Collections in Treasury Tax and Loan Accounts

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FEDERAL RESERVE BANK
OF NEW YORK
Fiscal Agent of the United States

I" Circular N o. 5 3 3 7 ~1

L

M ay 16, 1963

J

Deposits of June Tax Collections in Treasury Tax and Loan Accounts

To All Treasury Tax aiul 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
June 1 through June 28, 1963, of checks of $10,000 or more, representing payments
of corporation and individual income taxes due June 15, 1963. 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, however, 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 June 24,
1963. 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 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.