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F E D E R A L R E S E R V E BANK O F N EW YO RK Fiscal Agent of the United States r Circular No. 5 8 1 1 T May 16, 1966 J L Deposits of June 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 June 15 through June 30, 1966, of checks o f $10,000 or more, representing payments of corporation and individual income taxes due June 15, 1966. Drawee banks qualified as Special Depositaries o f Public Moneys may receive up to 50 per cent o f 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 o f 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, fo r the tax checks included in the special deposits o f the Directors of Internal Revenue during the period. The amount shown in the certificate will be fo r 50 per cent of the amount o f those checks eligible for 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 of sales to the depositaries of customers’ tax anticipation Treasury bills maturing June 22, 1966. As the Treasury has in the past stated, it does not look with favor upon such transactions, inasmuch as they increase the amount o f 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 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.
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