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FED ER A L R E SE R V E BANK OF N EW YORK Fiscal Agent of the United States J" Circular No. 5 6 L May 24, 1965 UN ITED STATES SAVINGS BONDS, SERIES E Instructions to Issuing Agents Revision of Operating Circular No. 20 To All Issuing A gen ts in the Second Federal R eserve D istrict Qualified fo r Sale o f United States Savings Bonds, Series E : Enclosed is a copy of our Operating Circular No. 20, Revised May 24, 1965. The revised circular incorporates the outstanding supplement to the superseded edition of the circular and contains editorial changes and refer ences to the forms now in use that have replaced the forms specified in the superseded circular. It also contains other changes, as follows: Paragraph 1 is new and requires any organization qualified as an issuing agent that changes its name or corporate title to apply for requalification in its changed name or corporate title. Paragraph 15 (formerly 14) has been revised to conform to present practice of not requiring bond stubs sent to us to be grouped by issue date. Additional copies of the revised operating circular will be furnished upon request. A lfred H a y e s , President. Federal of R eserve New B ank Y ork Fiscal Agent of the United States r Operating Circular No. 20 "1 L Revised May 24, 1965 J UNITED STATES SAVINGS BONDS, SERIES E Instructions to Issuing Agents To All Issuing Agents in the Second Federal Reserve District Qualified for Sale of United States Savings Bonds, Series E : The Secretary of the Treasury has provided that issuing agents qualified for sale of United States Savings Bonds, Series E, must follow all regulations and instructions issued by the Secretary of the Treasury directly or through the Federal Reserve Bank o f the District in which they are located, as fiscal agent of the United States, covering the sale, issue, inscription, and validation o f the bonds and the disposi tion of registration stubs. The pertinent regulations of the Secretary are set forth in the current revisions o f Treasury Department Circu lars Nos. 530 and 653; this circular contains additional instructions. A table of contents of this circular appears on page 11. Questions that do not appear to be covered by the Treasury’s circulars or by this circular should be referred to our Savings Bond Department before action is taken. Requalification of issuing agents 1. I f any organization qualified as an issuing agent changes its name or corporate title, such issuing agent should apply for requalifi cation in its changed name or corporate title. I f any organization not qualified as an issuing agent absorbs or becomes the successor of an organization that is so qualified, the absorbing or successor organiza tion does not thereby qualify as an issuing agent; if it desires to qualify, it should duly apply for such qualification. Authority of issuing agents 2. All organizations qualified as issuing agents are authorized to sell and issue Series E bonds to individuals (natural persons) only. The bonds may be inscribed only in the authorized forms of registra tion specified in Treasury Department Circular No. 530. Employers qualified as issuing agents for sale of Series E bonds to employees participating in a payroll savings plan are also authorized to sell and issue bonds to individuals not participating in the plan. 3. Only the Federal Reserve Banks and Branches and the Treasury Department are authorized to issue Series E bonds registered in names other than those of individuals. Issuing agents are authorized to receive applications for the purchase of bonds from others than indi viduals and to forward the applications and payments to us; special application forms for this purpose will be furnished to issuing agents by this Bank upon request. Sale of bonds—receipt of checks tendered in payment 4. Issuing agents should accept cash and savings stamps in pay ment of Series E bonds, and may accept checks. However, an issuing agent who accepts a check does so at its own risk and subject to the limitations specified in paragraph 5 on checks drawn payable to the order of the Treasurer o f the United States or of this Bank. The following instructions should be observed by issuing agents when checks are tendered in payment for bonds: (a) The bond should not be released for delivery until sufficient time has elapsed after deposit for the cheek to be returned to the agent in the event it is uncollectible. (b) I f the bond is delivered and the check is subsequently returned unpaid, the agent will be expected to obtain payment or have the bond returned immediately for cancellation. (c) I f the agent fails to obtain prompt payment for or the return of the bond after two requests therefor, the agent’s file or a photographic copy thereof should be forwarded promptly to this Bank for further action. (d) I f the recovery of the bond or the amount due is not effected, the agent will be required to make payment of the issue price. I f the agent so desires, we will cause the entry of an appropriate notation against the bond, and, if and when the bond is presented for redemp tion, the agent will be advised. 5. A ny issuing agent that is a banking institution qualified as a Special Depositary pursuant to Treasury Department Circular No. 92 (Revised), as amended, is authorized to endorse any cheek drawn on itself and payable to the order of the Treasurer of the United States or o f this Bank in payment o f savings bonds received by such insti tution, as follow s: For credit to Treasury Tax and Loan Account Federal Reserve Bank of New York Fiscal Agent of the United States in payment for U. S. Government securities (Name of Bank) and credit the proceeds of the check to its Treasury Tax and Loan Account. A n issuing agent qualified, as a Special Depositary may handle in the same manner checks drawn on itself and made payable to the order of substantially similar payees, such as “ Secretary of the Treasury,” “ United States Treasury,” “ Treasury Department,” or “ Federal Reserve Bank.” Except as herein expressly authorized, iH H l mm no issuing agent is authorized to endorse cheeks drawn payable to the order o f the Treasurer of the United States or of this Bank, and delivered to such issuing agent in payment for bonds; and in no case will we receive, in remittance for Series E bond stock, any check delivered to any issuing agent in payment for bonds. Accordingly, if any issuing agent receives, in payment for a Series E bond, any check drawn payable to the order of the Treasurer of the United States, or of this Bank, that it is not authorized to endorse as herein provided, the bonds should not be issued by the agent; but the application and check should be forwarded to us, in order that the check may be cleared and the bond issued. Custody of bond stock 6. Issuing agents are expected to have adequate facilities to safe guard bond stock in their possession. Agents are responsible for bond stock furnished to them, and whether or not they procure insurance or take other protective measures to guard against the loss of bond stock is a matter for their decision. In the absence of negligence, however, and upon proof of the facts pertaining to a loss, the Treasury Department may grant relief to an issuing agent for lost, stolen, or destroyed bond stock. Forms 7. Each of the forms referred to below for requisitioning Series E bonds, remitting for the bonds, and returning stubs and spoiled un delivered bonds should be executed by a duly authorized officer or employee of the issuing agent. Supplies of such forms may be obtained upon request addressed to our Savings Bond Department; with each shipment of such forms, a reorder form is enclosed for obtaining addi tional supplies. Requisition for bonds 8. Issuing agents may obtain unissued Series E bonds from this Bank by submitting a requisition for bond stock on Form SAVB 381. An agent should limit its inventory o f bond stock to three times its average monthly sales. Payment in full of the issue price of the bonds desired must accompany requisitions submitted by agents that have agreed to pay in advance for bond stock. Inscribing bonds 9. Care should be exercised in inscribing bonds. Erasures or alterations on a bond are not 'permitted. Bonds should be inscribed as follow s: (a) A typewriter or addressing machine should be used to insure the legibility of the inscriptions, not only on the bonds but also on the stubs. ( Stubs of inscribed bonds are microfilmed by the Treasury Depart ment for its permanent record, and it is essential that all entries on them be easily readable.) 3 (b ) The name and post office address (including Zip Code) o f the registered owner should be inscribed in the space provided in the center o f the bond and stub, to the right o f the punched area. I f the bond is to be mailed in a window envelope, the name and address o f the registered owner should be placed so that it will appear properly in the window. (c) The issue date (month and year only) should be inscribed in the space provided in the upper right portion o f the bond. Each bond should be dated as o f the first day o f the month in which full paym ent o f the issue price is received by the issuing agent. (d ) The name o f the issuing agent and the date on which the bond is inscribed should be imprinted in the space indicated by the circle on the bond and stub, using the stamp furnished by us fo r this purpose or imprinting the name and address o f the issuing agent and date o f issu ance by use o f a plate on an addressing machine. Spoiled bonds and return of unissued bonds 10. Whenever an error has been made in inscribing a bond and the error has been detected before the bond has been delivered, the incorrect bond and original stub should be marked “ Spoiled,” the issuing agent’s stamp impressed thereon, and a new bond issued. Spoiled bonds and their original stubs should be returned to this Bank, addressed as indicated in paragraph 18, with Form SAY B 380, but the stubs should not be stapled, clipped, pasted, taped, or in any other manner affixed to the spoiled bonds; instead, they should be grouped separately and assembled in the same order as the spoiled bonds. The form may also be used to transmit unissued bonds being returned, together with their original stubs. 11. I f an error made in inscribing a bond is not detected until after the stub has been sent to us, the issuing agent must not issue a new bond to make the correction. The incorrectly inscribed bond should be obtained from the owner and sent to us with an appli cation executed by the issuing agent on Form 15 (which may be obtained from this Bank), requesting reissue of the incorrectly issued bond. A new bond with the correct inscription will be issued by us and delivered in accordance with the instructions o f the issuing agent. Registration stubs 12. Before sending original registration stubs to this Bank with reports o f sales, the stubs should be examined to see that they carry a legible inscription of the form of registration, the issue date, and the date of actual issue. Duplicate stubs, which come with types A and B bond assemblies only, may be used by issuing agents for the purpose of obtaining receipts from the purchasers for the bonds delivered and may be retained by the agents for their records. 13. I f a citizen of the United States temporarily residing abroad is named as owner, and his foreign address is given in the registration, the issuing agent should certify on the lower portion o f the original registration stub (so as not to interfere with the registration) that the owner is a citizen of the United States temporarily residing abroad. 4 14. The original registration stubs are specially prepared and punched so that they may be counted, sorted, and listed by the use of electronic equipment. Stubs that have been damaged as the result of folding, tearing, or perforating cannot be handled electronically, and issuing agents are requested, therefore, to see that stubs are not folded, pinned, stapled, taped, clipped, or mutilated in any manner. Report of sales and remittance for bonds sold 15. Issuing agents should submit to this Bank on Form PD 3252-1 reports of sales of Series E bonds at least once each calendar month, whether or not there are any sales to report. Reports should be made more frequently if warranted by the volume of sales. The reports of agents who do not pay in advance for bond stock should always be accompanied by remittances for the bonds reported sold. Reports from all agents should be accompanied by the original stubs from the bonds reported sold. Stubs of bonds should be assembled in one or more groups, with no group containing more than 6,000 stubs or stubs of bonds exceeding $900,000 (issue price). A separate report should accompany each group. 16. All issuing agents who do not pay in advance for bond stock should credit the proceeds of sales of bonds in a separate account on their books to be known as “ Series E Bond Account.” Whenever a report of sales is made, as required by paragraph 15, the issuing agent should remit so much o f the balance in the Series E Bond Account as represents the proceeds of the sales reported. When a payment is to be made by credit to a Treasury Tax and Loan Account, that method of payment should be indicated in the space provided on Form PD 3252-1. 17. United States Savings Stamps received by issuing agents may be sent to us in payment for bonds sold. To avoid unnecessary dupli cation in the later handling of the stamps, issuing agents are asked to send the stamps to this Bank instead o f to post offices unless to do so would prove inconvenient. The stamps should be accounted for on the report of sales, Form PD 3252-1, and should be included in the package containing the report and the original bond stubs. The stamps should be canceled, either by perforation or by a cancelling stamp with nonwashable black ink, but the cancellation must be made in a manner that will not make verification difficult. On each paid album, the out side front cover (or back cover, if necessary) should show the total dollar amount of stamps in the album, legibly recorded in ink, and also the impression of the issuing agent’s dating stamp. 18. All remittances and shipments of stubs or spoiled bonds should be addressed as follow s: Federal Reserve Bank of New York Savings Bond Department Federal Reserve P. O. Station New York, N. Y. 10045 5 Delivery of bonds by mail 19. I f bonds are to be delivered by mail, they may be sent by ordinary first-class mail, without payment of postage, in special pen alty envelopes with distinctive markings to indicate the character of the contents. Such envelopes will be furnished to issuing agents (except Federal departments and agencies) by this Bank upon written request officially signed, specifying whether regular or window envel opes are desired. Such envelopes may not be obtained in any other manner. 20. The following instructions for the use of special penalty envelopes must be carefully observed by all agents: (a) Deliveries o f bonds by mail in special penalty envelopes must be restricted to those cases where personal delivery either is not practic able or is inadvisable. (b) The name and return address o f the issuing agent must be printed or stamped in the blank space in the upper left corner on the face o f the envelopes over the words “ Official business.” (c) The special penalty envelopes may be used only fo r the purpose provided. Attention is directed to the fact that a fine may be imposed fo r improper use o f special penalty envelopes. The Post Office Depart ment has ruled that the envelopes may not be used to mail matter other than bonds even though postage is paid, but that there is no objection to enclosing a letter o f transmittal describing the contents or containing information as to the condition o f an employee’s bond account under a payroll savings plan. Firm advertising material even though relating largely to savings bond campaigns should not be enclosed in special penalty envelopes. (d ) The utmost care should be used in enclosing bonds in envelopes and in effecting delivery o f the bonds to the local post office. They should not be deposited in an ordinary mail box, since this would not insure special handling o f the envelopes by the post office upon receipt. Agents are not required to obtain receipts evidencing delivery to the post office. (e) The Government Losses in Shipment Act, as amended, is appli cable to shipments o f inscribed bonds in special penalty envelopes, and claims fo r relief in the event o f losses in shipment may be made as p ro vided in the A ct and the regulations issued thereunder. No reports of shipments will be required from issuing agents, nor will it be necessary to mail to the addressees separate notices o f the shipment o f bonds. How ever, agents will be expected to maintain appropriate records o f all ship ments, so that it will be possible to prove the exact extent o f loss in the event claim is made fo r replacement o f bonds or fo r payment pursuant to the Government Losses in Shipment Act. The Treasury Department has stated that, in the absence o f suspicious or unusual circumstances, p roof sufficient to establish the exact extent o f loss would consist o f (1) the application for bonds or a schedule o f purchases showing the require ment or necessity o f mailing a bond or bonds, (2) the related bond in for mation recorded either on the application, bond stub, or elsewhere in the records usually maintained by an agent, and (3) evidence o f a uniform method o f handling such items requiring mailing. Evidence o f uniformity o f procedure and exercise o f due care in handling the bonds at the time o f enclosure in envelopes, sealing thereof, and disposal o f the items thereafter are the important factors. I f a bond mailed by an issuing 6 agent is not received by the owner, we should be promptly notified of the serial number o f the bond and name and address o f the registered owner; we will furnish instructions and forms to be used in applying for the issuance o f a substitute bond. (f) Bonds may be delivered by mail at the risk and expense o f the United States within the United States, its possessions, Puerto Rico, and the Canal Zone. Special penalty envelopes should not, therefore, be used to mail bonds to purchasers at addresses outside the specified areas. 21. All Government departments and agencies are required to reimburse the Post Office Department for all articles mailed under the penalty indicia. Accordingly, all issuing agents must furnish this Bank with a quarterly report as of the last days of March, June, September, and December in each year on their use of special penalty envelopes. The quarterly report, which should be made not later than the fifth day after the end of each quarter, should be made on forms furnished by this Bank to issuing agents prior to the close of each quarter, and should contain the following information concerning the penalty envelopes: (a) Number on hand at end o f the quarter preceding the one reported on. (b ) Number received during the quarter reported on. (c) Number spoiled and destroyed during the quarter reported on (penalty envelopes used in delivering savings bonds through other than postal channels should be reported as spoiled). (d ) Number used to mail savings bonds during the quarter re ported on. (e) Number on hand at the end of the quarter reported on. The Treasury has requested issuing agents to use care in compiling data relating to the number of penalty envelopes used in each quarter. Undeliverable bonds 22. Every issuing agent should make diligent effort and exhaust all available means to make delivery of bonds to the registered owners. When, however, the bonds have been issued by an issuing agent at the request o f a person or organization other than the registered owner, the issuing agent should request that other person or organization to make the necessary effort to deliver the bonds. 23. As used in these instructions, the term “ undeliverable bond” includes any bond issued against payment in full that remains undelivered after a diligent effort has been made and all available means have been exhausted to make delivery, and that— (a) remains undelivered in the possession o f an authorized issuing agent, or in the possession o f an employer who operates a payroll savings plan but is not an authorized issuing agent, after three full months from the date on which the bond was issued, as shown by the issuing agent’s dating stamp; or 7 (b ) remains undelivered, regardless o f the date o f issue, in the possession o f an authorized issuing agent, whose qualification is being terminated. 24. The agent who issued the undeliverable bond should send it to this Bank accompanied by a statement setting forth the name of the owner (for this purpose the term “ owner” means the first person named on the bond), the name of the owner’s employer, the Social Security number of the owner, and an outline of the efforts made to effect delivery to the owner. Where more than one undeliver able bond is held for account of the same owner (whether or not the same or different coowners or beneficiaries are named on the bonds), all may be included in the same statement. 25. In cases where undeliverable bonds have been issued by the agent at the request o f a person or organization other than the owner, and that other person or organization has actually endeavored to deliver the bonds, the statement (referred to in paragraph 24) may be prepared by that person or organization on behalf of the issuing agent. In all such cases, the issuing agent should forward the bonds to us and should retain a copy of the statement. 26. Undeliverable bonds sent to us should not be canceled or endorsed in any manner. Bonds sent by an issuing agent, in the manner provided in paragraphs 28 and 29 for the sending to us of the stubs of bonds sold, spoiled bonds, and unissued or excess stock, will be covered by the Government Losses in Shipment Act, as amended. The issuing agent will be reimbursed in the amount of postage fees expended in accordance with the procedure set forth in paragraph 30. 27. A request from an issuing agent, organization operating a payroll savings plan, or registered owner for the release and delivery of a bond that was previously undeliverable should be addressed to the Bureau of the Public Debt, Division of Loans and Currency, 536 South Clark Street, Chicago, 111. 60605. The bond will be released by the Treasury and forwarded to the registered owner if satisfactory evidence is submitted establishing his right to the bond. The request should not be addressed to this Bank. Reimbursement for postage fees expended by issuing agents 28. Reimbursement will be made for postage expended by issuing agents in sending to us reports of sales, remittances, stubs of bonds sold, spoiled bonds, unissued or excess bond stock, and any other matter incident to the issuance of Series B bonds, provided the follow ing instructions are complied w ith : (a) Packages weighing under 16 ounces should be sent by first-class mail, unregistered, except that those containing unissued unspoiled bonds, cash, or remittances o f a comparable nature should be registered. (b ) Packages weighing 16 ounces or more, but not exceeding the weight and size limitations prescribed by postal authorities, should be sent by fourth-class mail, registered. When packages are registered, the sender should not pay registry fees since the Treasury Department will reimburse the Post Office Department directly, on a contractual basis, for such fees. Also, on each registered package, the sender should place, in close proximity to the return address, a notation by rubber stamp impression, printed slip, or otherwise, reading as follows: “ Registry Fee Paid By U.S. Treasury D ept.” 29. Printed stickers bearing the notation mentioned in paragraph 28 will be furnished upon request for the convenience of agents in complying with these instructions. 30. Reimbursement o f postage expended by an issuing agent in accordance with the foregoing provisions will be made by payment of a draft drawn upon this Bank on Form SAVB 223 by the agent claim ing reimbursement. The period covered by the drafts should be for one or more full calendar months. The drafts should be deposited and collected in the same manner as checks. Loss, theft, or destruction of bond stock or inscribed bonds 31. In the event of the loss, theft, or destruction of unissued bond stock or of inscribed bonds that have not been delivered to the pur chasers or registered owners thereof, this Bank should be notified immediately. Upon receipt o f such notice, the appropriate Treasury Department claim form will be furnished by this Bank. 32. In the event of the loss, theft, destruction, mutilation, or deface ment of a bond after delivery to the purchaser or registered owner, relief either by the issue o f a duplicate bond or by payment may be had under the provisions of the Government Losses in Shipment Act, as amended, upon filing a claim and furnishing proof of loss satisfac tory to the Treasury Department. In any such case immediate notice o f the facts, together with a complete description of the bond, should be given by the registered owner to the Bureau of the Public Debt, Division of Loans and Currency, 536 South Clark Street, Chicago, III. 60605. This description should include the series, month and year of issue, serial number, and name and address of the registered owner, as well as the name of any coowner or beneficiary appearing on the bond. Agents’ records of bonds issued 33. (a) Duplicate registration stubs.— Issuing agents should main tain for a period o f at least one year an adequate record of all bonds issued by them showing for each bond the series, denomination, serial number, date as of which issued, date actually issued, and the form of registration. The duplicate stubs with types A and B assemblies are designed for this purpose, and accordingly, should be inscribed unless the issuing agent maintains other adequate records o f bonds issued. After a period o f one year, inscribed duplicate stubs may be destroyed or salvaged as waste paper, provided they are mutilated in such manner that lists of bond owners could not be compiled therefrom. 9 Other bond-issuing records, except as provided in subparagraph (b) below, may be destroyed in accordance with the issuing agent’s wishes. Uninscribed duplicate stubs of issued bonds, and of bonds spoiled in issue, may be disposed of or salvaged as waste paper by the issuing agent after the face of each stub has been mutilated or defaced to prevent its use. (b) Applications.— Applications, including payroll authoriza tion records, for which bonds have been issued are original records and should be retained by issuing agents for two years from the date bonds covered thereby were issued, unless microfilm records of those documents are maintained. Effect of tliis circular on previous circular 34. This circular supersedes our Operating Circular No. 20, Eevised November 12, 1959, and the First Supplement thereto dated June 27, 1962. A lfred H ayes , President. 10 TABLE OF CONTENTS of Operating Circular No. 20 Paragraph Number Topic Requalification o f issuing agents ........................................................................ 1 Authority o f issuing a g e n ts .............................................................................. 2,3 Sale o f bonds— receipt of checks tendered in p a y m e n t............................. 4 ,5 Custody o f bond stock ........................................................................................... 6 Forms .......................................................................................................................... 7 Requisition for bonds ............................................................................................. 8 Inscribing bonds ..................................................................................................... 9 Spoiled bonds and return o f unissued b o n d s ........................................... 10,11 Registration stubs ..................................................................................... 12,13,14 Report o f sales and remittance fo r bonds sold ........................... 15,16,17,18 Delivery o f bonds by m a i l........................................................................ 19, 20, 21 Undeliverable bonds ................................................................ 22, 23, 24, 25, 26, 27 Reimbursement for postage fees expended by issuing a g e n ts ........ 28,29,30 Loss, theft, or destruction o f bond stock or inscribed b o n d s ................. 31, 32 Agents’ records o f bonds is s u e d .......................................................................... 33 Effect o f this circular on previous circular .................................................... 34 11
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