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CIRCULAR N O . 6© FEDERAL RESERVE BANK OF NEW YORK R E L A T I N G T O A P P L I C A T I O N S T O SELL U . S. B O N D S N E W YORK, January n , 1917. T o T H E CASHIER, SIR: Section 18 of the Federal Reserve Act provides t h a t any member bank desiring to retire the whole or any part of its circulating notes may file with the Treasurer of the Unites States an application to sell for its account at par and accrued interest United States bonds securing circulation to be retired. It seems appropriate at this time to issue blank forms for the use of member banks of this district in making applications during the year 1917 together with suggestions concerning the procedure to be followed. In making application member banks should bear in mind the following points: 1st: T h e only bonds that are eligible for sale in this manner are U. S. bonds which at the time of application are actually securing circulation of national bank notes to be retired. 2nd: T h e applications should be forwarded directly to the Treasurer of the United States, Washington, D . C. 3 r d : T h e applications must be received b y the Treasurer of the United States at least ten days before the end of the quarterly period a t which the sale is desired to be made. Therefore for the quarter ending March 3 1 , 1917, applications should be received by the Treasurer of the United States on or before March 2 1 , 1917. 4 t h : I t is optional with the Federal Reserve Board whether or not to require the Federal reserve banks to purchase the bonds offered for sale. 5 t h : If the Federal reserve banks are required by the Federal Reserve Board to purchase the bonds the price will necessarily be par and accrued interest. 6 t h : T h e aggregate amount of such bonds which the required or permitted to purchase is limited to $25,000,000. in a m o u n t m a y furthermore be reduced by the amount of bonds purchased during the same year by the Federal reserve banks Federal reserve banks can be any one year but this aggregate bearing the circulation privilege in the open market. T h e Federal Reserve Board has announced t h a t it will not require Federal reserve banks t o purchase during the year 1917 more than $15,000,000. of bonds offered for sale by member b a n k s through the Treasurer of the United States. I t will, however, require Federal reserve b a n k s to purchase on April 1, 1917, so much of t h a t a m o u n t of bonds as may be offered for sale through the Treasurer on or before March 2 1 , 1917, provided such bonds, added to the a m o u n t of bonds bearing the circulation privilege, purchased by Federal reserve banks in the open market during the first quarter, do not exceed $25,000,000. £6 Although there is no legal limit on the amount of bonds which m a y be bought by Federal reserve banks in the open market, in order t h a t member banks m a y have an opportunity to sell the maximum amount of bonds under section 18, the Federal reserve banks will refrain from purchasing 2 % bonds in the open market until after March I, 1917, but will thereafter feel at liberty to make such purchases in the open market. Therefore, it is suggested t h a t member banks desiring to retire their circulation during the year 1917 under the provisions of section 18 of the Act file their applications with the Treasurer of the United States before March 1, 1917, and a t the same time advise the Federal reserve bank of their district the amount of each application to the Treasurer in order t h a t the Federal reserve banks may have prompt knowledge of the total amount of bonds offered to the Treasurer of the United States and thus be enabled to arrange their open market purchases with regard to the best interests of member banks. There is enclosed herewith an original form of application to the Treasurer of the United States which should be duly executed and forwarded direct to the Treasurer of the United States, Washington, D . C , also a duplicate of the same which should be executed and forwarded to this bank as advice to it of the application. Respectfully, R. H . TREMAN, Deputy Governor. D u p l i c a t e — T o B E FORWARDED TO THE F E D E R A L R E S E R V E B A N K OF N E W YORK APPLICATION _(Date) To the Treasurer of the United Washington, D. C. States, SIR: .National Bank oL I hereby In behalf of the_ make application t o you t o sell for its account a t par and accrued interest, United S t a t e s Bonds securing circulation of the said bank to be retired, as follows: DESCRIPTION OF BONDS NUMBERS TITLE OF ISSUE AND RATE MATURITY AMOUNT T<"»tal a m o u n t Respectfully, Cashier, National Bank of.
@FedFRASER