The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States r Circular No. 6 2 4 2 ~1 L November 7, 1968 J Paying Agents for Savings Bonds Authorized to Redeem Savings Notes, Effective November 1 To All Paying Agents for Savings Bonds in the Second Federal Reserve District: Enclosed is a copy of the Federal Register, Part II, dated October 25, 1968, which contains the text of the following Treasury documents, all dated October 18, 1968: Treasury Department Circular No. 750, Second Revision. The revised circular, effective Novem ber 1, 1968, authorizes duly qualified paying agents for savings bonds to redeem United States Savings Notes for cash under the same terms and conditions as savings bonds. Memorandum of Instructions Issued in Conjunction With Department Circular No. 750, Second Revision. The memorandum provides specific instructions for processing redemption and redemptionexchange transactions in savings bonds and notes, and detailed advice on the responsibilities of paying agents. Treasury Department Circular No. 751, Third Revision. The revised circular contains procedures for accounting for losses resulting from the redemption of savings bonds and notes. The Treasury Department has sent an announcement of the new authorization to the chief executive officers of all financial institutions qualified as paying agents for savings bonds. Please note that, as indicated in that announcement and in § 321.10 of Treasury Department Circular No. 750, Second Revision, savings notes are not eligible for payment until one year after the issue date of the notes; in all other respects the rules and regulations governing the redemption of Series E bonds apply to the redemption of savings notes. A lfred H ayes, President. FEDERAL REGISTER VOLUME 33 Friday, October 25, 1968 • NUMBER ® 209 Washington, D.C. PART II DEPARTMENT OF THE TREASURY Fiscal Service, Bureau of the Public Debt U.S. Savings Bonds and U.S. Savings Notes (Freedom Shares) (Dept. Circ. 750, 2d Rev., and Memorandum of Instructions; Dept. Circ. 751, 3d Rev.) No. 209— Ft. n ------ 1 RULES AND REGULATIONS 15826 Title 31— MONEY AND FINANCE: TREASURY Chapter II— Fiscal Service, Depart ment of the Treasury SUBCHAPTER B— BUREAU OF THE PUBLIC DEBT PART 321— PAYM ENTS BY BANKS A N D OTHER FINANCIAL INSTITU TIONS OF UNITED STATES SA V IN G S BO NDS A N D UNITED STATES S A V IN G S NOTES (FREEDOM SHARES) The regulations set forth in Treasury Department Circular No. 750, Revised, dated June 30, 1945, as amended (31 CFR, Part 321), have been further re vised and amended as shown below. The changes were effected under authority of section 22 of the Second Liberty Bond Act, as amended (49 Stat. 21, as amended; 31 U.S.C. 757c). This revision was effected pursuant to 5 U.S.C. 301. Notice and public procedures thereon are unnecessary as public property and con tracts are involved. Dated: October 18,1968. [s e a l] John K. C a r lo c k , Fiscal Assistant Secretary. Treasury Department Circular No. 750, Revised, dated June 30, 1945, as amended (31 CFR, Part 321), entitled: “Payments by Banks and Other Financial Institu tions in Connection With the Redemp tion of United States Savings Bonds,” is hereby retitled and otherwise amended to include United States Savings Notes (Freedom Shares), and issued as a Sec ond Revision, as follows, effective Novem ber 1, 1968. S u b p a rt A — G e n e ra l In fo rm ation Sec. 321.0 321.1 Applicability of regulations. Definition of terms as used in these regulations. S u b p a rt B— A u th o rity to A ct 321.2 321.3 321.4 321.5 321.6 Financial institutions authorized to act. Application and qualification. Evidence of authority. Paying agent fees and charges. Termination of qualification. S u b p a rt C— Scop e o f A u th ority 321.7 321.8 321.9 321.10 321.11 General. Payment to individuals named as owner. R e d e m p t io n -e x c h a n g e of Series E and J bonds for Series H bonds. Specific limitations of payment authority. Forwarding of securities not payable by agent. S u b p a rt D— P a y m e n t 321.12 321.13 321.14 321.15 Fiscal agents. Preservation of rights. Supplements, amendments, etc. A u t h o r i t y : The provisions of this Part 321 issued under sec. 22 of the Second Liberty Stat. 21, as Subpart A — General Information § 321.0 Applicability of regulations. The regulations in this part govern payments by banks and other financial institutions of U.S. Savings Bonds and U.S. Savings Notes. § 321.1 Definition of terms as used in these regulations. territory or possession of the United States, or the District of Columbia; (b) in the usual course of business accept, sub ject to withdrawal, funds for deposit or the purchase of shares; (c) are under the supervision of the banking department or equivalent authority of the jurisdiction in which incorporated; and (d) main tain regular offices for the transaction of their business, are eligible to become paying agents and, subject to the pro visions relating to qualification set out in § 321.3, are authorized to make payments in connection with the redemption of savings bonds and savings notes, but only in accordance with the provisions of this circular, and any memorandum of in structions, guides, notices, etc., issued by the Department of the Treasury relating to such authorization. Unless the context otherwise requires or indicates: (a) “Bond(s)” or “savings bond(s)” means only U.S. Savings Bonds of Series A, B, C, D, or E presented for cash pay ment, and Series E and J bonds presented for redemption-exchange for Series H bonds under the provisions of Depart ment Circular No. 1036 as amended (Part § 3 2 1 .3 A p p lica tion a nd q u a lifica tio n . 339 of this chapter). Savings Bonds of (a) Authority to qualify. Each Federal Series F, G, H, and K, and bonds of Series J ineligible for redemption-exchange un Reserve Bank, as fiscal agent of the der Department Circular No. 1036, as United States, is authorized to qualify hereunder any eligible institution located amended, are not included. (b) “Federal Reserve B ank(s)” or in its district1 which possesses adeqate “B an k(s)” means a Federal Reserve authority under its charter to act as pay Bank or Branch acting as fiscal agent of ing agent of savings bonds and savings notes. the United States. (b) New applications. An institution (c) “N ote(s)” or “savings note(s)” means a U.S. Savings Note (Freedom not previously qualified which desires to act as paying agent of savings bonds and Share). (d) “Owner(s) ” means an individual, savings notes on or after the effective i.e., a natural person, whose name is in date of this revision should apply to the scribed as an owner or co-owner in his Federal Reserve Bank of the district in which it is located on an applicationown right on a bond or note. (e) “Paying agent(s)” or “agent(s)” agreement form available from the Bank. means (1) any eligible financial institu No application-agreement will be ac tion duly qualified pursuant to the provi cepted requesting qualification solely as sions of this circular, or any previous paying agent either for savings bonds or revision thereof, to make payments, as for savings notes. Each applicationherein specified, of U.S. Savings Bonds, agreement filed hereunder shall include and U.S. Savings Notes, and includes the provisions prescribed in section 202 branches of such institutions located of Executive Order No. 11246, entitled within the United States, its territories “ Equal Employment Opportunity.” (42 and possessions, the Commonwealth of U.S.C. 2000e note) Puerto Rico and the Canal Zone, and (2) (c) Agents previously qualified. Any banking facilities of such institutions financial institution qualified and acting established at military installations of as a paying agent of savings bonds on the the United States and other places with effective date of this revision may con the specific approval of the Treasury tinue to so act under its previous quali Department. fication, but subject to the t rms and (f) “Redemption” and “payment” are • conditions hereof. Such agent will not used interchangeably for payment of a be required to qualify by separate appli bond or note in accordance with the cation-agreement to pay savings notes. terms of its offering and the regulations If a paying agent of savings bonds re governing said securities, and includes deems savings notes, and transmits the “ redemption-exchange,” i.e., any au same to the Federal Reserve Bank of its thorized redemption of securities for the district with a request to receive credit purpose of applying the proceeds, as pro therefor, it shall be presumed thereby vided under the terms of the offering, in that the governing board or committee payment for other securities offered in of such agent had theretofore under taken appropriate action to authorize exchange. (g) “Security (ies) ” means a U.S. Sav such redemptions and had agreed that the terms and conditions of its previous ings Bond or U.S. Savings Note. qualification as paying agent for savings Subpart B— Authority To Act Payment of securities. D e t e r m i n a t i o n of redemption values and payment procedure. Accounting for paid securities. Losses resulting from payments. S u b p a rt E— M isc e lla n e o u s P rovisio n s 321.16 321.17 321.18 Bond Act, as amended, 49 amended; 31 U.S.C. 757c. § 321.2 Financial institutions authorized to act. Commercial banks, trust companies, savings banks, savings and loan associa tions, building and loan associations (in cluding cooperative banks), credit unions, cash depositories, industrial banks, and similar financial institutions which (a) are incorporated under Fed eral law or under the laws of a State, 1For the purpose of this circular, eligible institutions in Puerto Rico, the Virgin Is lands, and the Canal Zone shall be considered as being within the Second Federal Reserve District and shall make application to the Federal Reserve Bank of New York, and eligible institutions in Guam shall be con sidered as being within the Twelfth Federal Reserve District and shall make application to the Federal Reserve Bank of San Francisco. FEDERAL REGISTER, V O L . 33, N O . 2 0 9 — FRIDAY, O C TO B E R 25 , 1968 RULES AND REGULATIONS bonds shall apply to savings notes as well. The granting of credit for such redemp tions by the Bank shall constitute quali fication of the agent to pay savings notes. § 3 2 1 .4 Evidence of authority. No announcement of or reference to an institution’s authority to pay savings bonds and savings notes, nor acts pur porting to have such authority, except as provided in § 321.3(c), may be made until written notice of qualification has been received from the Federal Reserve Banks, and then only in a form, manner and substance as may be approved by the Treasury Department or by the Bank. § 3 2 1 .5 P a yin g agen t fe e s a nd charges. (a) Scale of rates and procedures. Each paying agent shall receive reim bursement for all bonds and notes paid hereunder which are received by a Fed eral Reserve Bank and forwarded for the agent’s account to the Treasury De partment during each calendar quarter, according to the following scale: 15 cents each for the first 1,000 securities. 10 cents each for all over 1,000 securities, less any securities returned to the agent because they were ineligible for payment. The scale of rates shall be applicable separately to the agent and to each of its branches utilized in making payments under this circular, if the securities paid by each are separately scheduled and accounted for. (b) No charge to owners. Paying agents shall not make any charge what ever to owners of savings bonds and sav ings notes in connection with payments hereunder. § 3 2 1 .6 T erm in a tio n o f q u a lifica tion . The Secretary of the Treasury, or his delegate, may authorize a Federal Re serve Bank to terminate, by written notice, at any time and without prior demand or notice, the qualification here under of any paying agent in its district. A paying agent, upon notice to the Fed eral Reserve Bank through which it qualified, and following settlement of its account, may terminate its qualification. Subpart C— Scope of Authority § 3 2 1 .7 G eneral. Savings bonds and savings notes are issued only in registered form, are not transferable, may not be hypothecated or used as collateral for a loan, and, except as otherwise specifically provided in the regulations governing them, i.e., Department Circular No. 530, current revision (Part 315 of this Chapter), are payable only to the owner or coowner named on the securities. Payment to a designated beneficiary is not authorized. § 3 2 1 .8 P aym ent to in divid u al n am ed as ow ner. Subject to the terms and conditions appearing on the securities, to the gov erning regulations, and to the provisions of this circular, an agent may make pay ment of any savings bonds of Series A, B, C, D, or E, or of any savings note, upon presentation and surrender by the indi 15827 vidual whose name is inscribed as the owner or coowner on the security: Pro vided, The individual is known to the agent or establishes his identity in ac cordance with the Department’s instruc tions and identification guides. (See the Treasury Department’s statement to paying agents on identification, dated Dec. 19, 1947.) This authority to make payments will be held to include: (a) Change of name by marriage. Where the name of the owner as in scribed on the security has been changed by marriage and the agent knows or establishes that the presenter and the person whose name appears on the secu rity is one and the same individual. The signature to the request for payment should show both names, for example, “Miss Mary T. Jones, now by marriage Mrs. Mary J. Smith.” An agent is not authorized to pay a security for an owner whose name as inscribed thereon has been changed in any other manner. (b) Parent of a minor. Where the name of the owner inscribed on the se curity is that of a minor child who is not of sufficient competency and under standing to execute the request for pay ment and comprehend the nature of such act but upon whose behalf request for payment is made by a parent with whom the child resides: Provided, how ever, The form of registration does not indicate that a guardian or similar reppresentative of the estate of the minor owner has been appointed or is other wise legally qualified. The parent re questing payment must sign the request for payment in the form, for example, “ John A. Jones, on behalf of John C. Jones,” and place an endorsement in substantially the following form, which may be typed or imprinted on the back of the security: “ I certify that I am t h e ---------------------(father or mother) of John C. Jones and the person with whom he resides. He i s ______ years of age and is not of sufficient competency and un derstanding to sign the request.” Such a payment may not be made to any per son other than a father or mother. § 3 2 1 .9 R e d e m p tio n -e x ch a n g e o f Series E and J b on d s f o r Series H b on d s. Subject to the terms and conditions appearing on the bonds, the governing regulations, and the provisions of this part, an agent may accept for redemp tion-exchange Series E and eligible J bonds under the provisions of Depart ment Circular No. 1036, as amended (Part 339 of this chapter). § 3 2 1 .1 0 S p e cific lim ita tion s m en t authority. of pay An agent is not authorized to pay a bond or note: (a) If presented for payment prior to the end of 2 months from the issue date in the case of a Series E bond, and of 1 year from the issue date in the case of a note (the issue date appears on the upper right-hand portion of the face of the securities). Any payment or ad vance to an owner before his security is eligible for redemption is not authorized. (b) If the agent does not know or cannot establish the identity of the per son requesting payment as the owner of the security, including the establish ment of the identity of a parent re questing payment on behalf of a minor child, as set forth in § 321.8(b). (See the memorandum of instructions issued in conjunction with this circular and the Treasury Department’s statement to pay ing agents on identification, dated Dec. 19, 1947.) (c) If the owner requesting payment does not sign his name in ink as it is inscribed on the security and show his home or business address. (See, also, § 321.8 (a) and (b).) (d) If the security bears a material ir regularity, for example, an illegible, in complete, or unauthorized inscription, is sue date, or issuing agent’s validating stamp impression, or if any essential part thereof appears to be altered, or is mutilated or defaced in such a manner as to create doubt or arouse suspicion. (e) If the security is registered in the name of an organization or a fiduciary. (f) If the Treasury Department reg ulations require the submission of docu mentary evidence to support the re demption, as in the case of deceased owners, incompetents or minors under legal guardianship, or the change of an owner’s name as inscribed on a bond or note for any reason other than mar riage. (g) If the owner named on the secu rity and requesting payment is a minor who, in the opinion of the agent, is not of sufficient competency and under standing to execute the request for pay ment and comprehend the nature of such act. (See, also, § 321.8(b)). (h) If it is known to the agent that the owner has been declared, in accord ance with law, incompetent to manage his estate. (i) If partial redemption is requested. § 3 2 1 .1 1 F orw a rd in g o f p ayable b y agent. securities n o t Any securities which an agent is not authorized to pay under the provisions of this part should be forwarded for re demption, after certification of the re quests for payment, to the Federal Re serve Bank or Branch of the district, or the Office of the Treasurer of the United States, Securities Division, Washington, D.C. 20220. If an agent undertakes to forward such unpaid securities at the re quest and in behalf of the person entitled to payment, they must be sent separate and apart from bonds and notes which the agent has paid. Any documentary evidence required to support the redemp tion should accompany the securities when forwarded to the Federal Reserve Bank. Subpart D— Payment § 3 2 1 .1 2 P a ym en t o f securities. (a) Examination. Before making pay ment of a bond or note, the agent shall examine it to determine: (1) That the security is eligible for payment and is one which the agent is authorized to pay under the provisions of this part, and FEDERAL REGISTER, V O L . 33, N O . 2 0 9 — FR iD AY, O CTO B E R 25 , 1968 RULES AND REGULATIONS 15828 (2) That thejsecurity does not bear material Irregularity or alteration, and is not mutilated or defaced. (b) Identification. The agent shall de termine that the individual presenting the security is the same person whose name is inscribed as owner or coowner thereon. Unless the presenter is a per son whose identity is well known to the agent, or is an established customer, he should be asked to furnish satisfactorydocumentary or personal identification. (c) Execution of request. The agent shall require that the request for pay ment on the back of the security be executed by the presenter in the presence of one of its officers or authorized em ployees, and the request shall include the home or business address of the in dividual making the request on at least one of the securities. Where the request has already been executed when the security is presented, it should ordinarily be reexecuted. (d) Certification of request. Each agent submitting paid bonds and notes shall be understood by such submission to have represented and certified that the identity of the owner or coowner requesting payment has been duly estab lished. Therefore, an agent will not be required in the case of any security which it pays to complete the certifica tion form at the end of the request for payment, nor determine the authenticity of any certification which may appear thereon at the time it is presented for payment. § 3 2 1 .1 3 Determination o f redemption values and payment procedure. The redemption value of a security is determined according to the period of time that it has been outstanding, and the table of redemption values appli cable thereto. After establishing such value for each security presented, the agent shall place on the face thereof the word “PAID,” the amount and date of actual payment and the name, location, and code number assigned to the agent by the Federal Reserve Bank. The affix ing of such data shall constitute a certifi cation by the paying agent that the secu rity was redeemed in accordance with "this circular, and that the proceeds of re demption were paid to the presenter. Payment shall be made in cash, a credit to the presenter’s checking, savings or share account with the agent, or a check or similar instrument payable to his order. § 3 2 1 .1 4 A cco u n tin g f o r p a id securities. The paying agent shall forward all paid securities to the Federal Reserve Bank of the district in accordance with the latter’s instructions. Upon receipt of the paid securities, the Federal Reserve Bank shall make immediate settlement with the paying agent for the total amount of payments made thereon, except that such settlement shall be subject to ad justment if any discrepancies are dis covered at a later date. § 3 2 1 .1 5 Losses m ents. resu ltin g fr o m pay If a loss shall result from a payment made in connection with the redemption aof any security hereunder, the paying agent involved shall have a full and com plete opportunity to present all of the facts pertaining thereto. Determination of losses shall be made pursuant to sec tion 22(i) of the Second Liberty Bond Act, as amended. (Title 31, United States Code, sec. 757c(i).) Subpart E— Miscellaneous Provisions § 321.16 Fiscal agents. The Federal Reserve Banks and Branches, as fiscal agents of the United States, are authorized to perform such services as may be requested by the Sec retary of the Treasury in connection with this part. § 321.17 Preservation o f rights. Nothing contained in the l'egulations in this part shall limit or restrict any existing rights which holders of savings bonds and savings notes may have ac quired under the circulars offering such securities for sale and the regulations prescribed therefor. § 321.18 Supplements, amendments, etc. The Secretary of the Treasury may at any time or from time to time revise, supplement, amend, or withdraw, in whole or in part, the provisions of this part, or of any revisions, supplements, or amendments thereto. M of I n s t r u c t io n s I ssued in C o n ju n c tio n W ith D e p a rtm e n t C ir c u l a r No. 750, S e c o n d R e v i s i o n em orandum f is c a l s e r v ic e , bureau of th e p u b l ic debt The Department of the Treasury, Office of the Secretary, Washington, October 18, 1968. I. G eneral In f o r m a t io n 1. Purpose. This memorandum is issued for the guidance of banks and other finan cial institutions which have qualified as paying agents of U.S. Savings Bonds and U.S. Savings Notes (Freedom Shares) under the provisions of Treasury Department Cir cular No. 750, Second Revision. Its purpose is to provide (a) information to supple ment the regulations contained in the circular, and (b) specific instructions for processing redemption and redemptionexchange transactions. 2. Scope. The material relates to (a) U.S. Savings Bonds of Series A, B, C, D, or E and U.S. Savings Notes (Freedom Shares) presented for cash payment, and (b) Series E and J bonds presented for redemptionexchange for Series H bonds under the pro visions of Department Circular No. 1036 (31 CFR, Part 339). The payments of Savings Bonds of Series F, G, H, and K, and bonds of Series J ineligible for redemption-exchange under department circular No. 1036, are not covered by this memorandum. 3. Organization. This memorandum is organized to provide, in addition to the general information set out in this part, detailed advice as to the responsibilities of organizations acting as paying agents (Part I I ) , and instructions for processing trans actions (Part I II). 4. Other pertinent circulars, (a) Depart ment Circular No. 530, current revision, the regulations governing U.S. Savings Bonds; (b) Department Circular No. 653, current revision, the offering circular for U.S. Sav ings Bonds, Series E; and (c) Department Circular, Public Debt Se ries 3-67, current revision, the offering circu lar for U.S. Savings Notes. II. R e s p o n s ib ilit ie s o f P a y in g A g e n ts 5. General. A financial institution which is a qualified paying agent is obliged to cash savings bonds and notes for any presenter, whether or not a customer, during its reg ular business hours (but not during evening and Saturday hours, if open dtiring such periods primarily as a service for its own customers) in accordance with Department Circular No. 750, current revision, these in structions, and the Department’s statement to paying agents on identification, dated December 19, 1947. An agent must not ad vance money on, make loans on, or discount the redemption values of the securities, nor in any manner assist others in doing so. It shall also make no charges for redemption. Violation of the Department’s policy, as set forth above, will be cause for disqualifi cation. 6. Payment to presenter. Payment may be made only to an individual who (a) pre sents the security and establishes his iden tity as the person named thereon as owner or co-owner, and (b) signs the request for payment in the presence of an officer or authorized employee of the paying agent. An agent may accept securities for payment by mail, or otherwise, from known depos itors, provided each such depositor is also the owner requesting payment. In such cases the agent should be satisfied that the signature to the request for payment is that of the “owner-depositor,” and should have written instructions from him to credit the proceeds to his checking, savings, or share account, or to make other disposition thereof. For the agent’s protection, such instructions should be retained. 7. Examination of security. Upon its presentation for redemption or for redemp tion-exchange, each agent should examine the security to establish the following: (i) In the case of a bond, that it is not less than 2 months old or in the case of a note, less than 1 year old; (ii) It is presented by an owner or co owner (not by a beneficiary) or a parent on behalf of a minor owner or coowner not of sufficient competency and understanding to comprehend the nature of the act; (iii) No documentary evidence is required to redeem it; (iv) It is not presented by anyone acting under a power of attorney; (v) It is not in the name of a corporation, association, partnership, guardian, admin istrator, trustee, or other fiduciary; (vi) The presenter’s name, as it appears on the security, has not been changed in any manner other than by marriage; (vii) The presenter, to the knowledge of the agent, has not been declared, according to law, to be incompetent to manage his estate; (viii) Its issue date is legible; (ix) It has not been mutilated and does not bear material irregularities, such as altered, illegible, incomplete, or unauthorized inscriptions; and (x) It is not a Series F, G, H, J, or K bond, unless it is an unmatured J bond presented for redemption-exchange. If the agent assumes full responsibility therefor, it may make payment, because of its knowledge of the facts or because it wishes to rely on the integrity of the owner, of any eligible security which bears a minor ir regularity, such as a misspelling of a name, a transposition of letters, etc. Otherwise, securities which do not meet the above standards should be forwarded to the Fed eral Reserve Bank. 8. Identification of presenter — (a) Identi fication guide. The Department of the Treasury has issued a statement on identi fication, dated December 19, 1947, for use by paying agents in redeeming securities, FEDERAL REGISTER, V O L . 33, N O . 2 0 9 — FRIDAY, O CTO BER 25 , 1968 RULES AND REGULATIONS which, if followed, should enable them to provide reasonable payment accommodations for owners, including noncustomers, and, at the same time, to protect themselves from losses. (b) Record of identification practice. The agent at the time of payment should make a notation on the back of the paid security, or in its own records, specifying precisely what was relied upon to establish the pre senter’s identity. The identification practice should be adequate to identify the person under the circumstances of the transaction. Otherwise, the agent runs the risk that no evidence can be developed to show that it acted with due care, in which case it could not be relieved of liability for any loss that might develop. 9. Request for payment. The following provisions relate to the execution of all re quests for payment, whether the security is paid over-the-counter or is forwarded to a Federal Reserve Bank for redemption: (a) Execution of request. The presenter must sign his name exactly as his name is inscribed on the security and show his cur rent address in the request for payment, except in the following cases: (1) Where there are slight errors or varia tions in the spelling, the request for pay ment should show the name of the owner as inscribed on the security followed by the correct signature. (2) If an owner signs his name to the re quest by mark, the signature “X ” should be identified in the form “John J. Jones (X) his mark”, and one person, in addition to the agent’s employee paying the security, must act as witness, and should attest thereto in substantially the form: “Witness to signature by mark” and sign his name and show his address immediately thereunder, on the back of the security. (3) If an owner’s name has been changed by marriage, the owner’s signature to the request for payment should be signed in the form, for example: “Mrs. Mary Jones Smith, changed by marriage from Miss Mary T. Jones”. (4) Securities may be paid to a parent on behalf of a minor owner, not of sufficient competency and understanding, as specified in the regulations. If a security is presented in person with the request for payment already completed, the owner should be required to sign again immediately above or below the first signature. (b) Partial redemptions. Partial redemp tion of a savings bond or note, in denomi nations of $50 or higher, but only in amounts eorresponding to authorized denominations, may only be made by a Federal Reserve Bank. In such cases, the words “to the ex tent of $_____________(face amount) ” should be added to the first sentence of the request for payment and the request should then be completed in the regular manner. (c) Payment over-the-counter. An agent is not required to complete the certification to the request on securities it pays over-thecounter. The submission of paid securities to the Department shall represent a certifi cation by the agent that the identity of the owner requesting payment was duly established. (d) Payment by Federal Reserve Bank. Where a security is being forwarded to a Federal Reserve Bank for payment, the cer tification form below the request for pay ment should be completed. 10. Determination and payment of re demption proceeds, (a) Redemption value tables. Agents will be supplied with tables of redemption values covering bonds of Series A-E, bonds of Series J, and savings notes. Additional tables may be obtained upon re quest from the Federal Reserve Bank of the district. Care should be exercised to use the 15829 correct table for the month in which the (month, day, and year) of payment and the particular security is cashed. The public may signature or initials, etc., of the agent’s em purchase tables for Series A-E bonds, covering ployee who approved the payment. A black half-yearly periods, from the Superintendent or dark color ink (not green) should be used of Documents, U.S. Government Printing and care should be taken not to smear the Office, Washington, D.C. 20402. stamp impression or the writing. (b) Payment immediately prior to ma 12. Redemption-exchange of Series E and turity or date of increase in value. If an J bonds for Series H Bonds, (a) General. owner presents a security for payment just Except as specifically modified by this para prior to the month in which the security in graph, the instructions of this memorandum creases in value, the agent should, if prac governing the cash payment of bonds and tical, advise the owner of the fact so that notes shall also govern the redemption and he may, if he desires, delay the payment to processing of Series E and J bonds accepted the next month to obtain the increase in for redemption-exchange for Series H bonds. value. No agent is authorized to pay an The following rules are applicable: owner the current value of a security and (1) In general, an agent may accept for then defer presentation to the Treasury for redemption-exchange: the purpose of obtaining such increased (1) All Series E bonds, and value for its own profit. (ii) Series J bonds received not later than (c) Payment. After the redemption value is determined, it may be paid to the owner 6 months from the month of maturity, pro vided the current redemption value of the in cash, or, upon request, by a credit to the owner’s checking, savings, or share account, bonds submitted is not less than $500. (2) There is no maximum limit of bonds or by issuance of a check or similar instru that may be included in a transaction, except ment payable to the owner. 11. Completion of transaction, (a) Social that the highest even $500 multiple of the security account number. If the social se proceeds must be applied to the exchange. curity account number of the payee is shown (3) Either co-owner may request the in the inscription, that number should be exchange if the Series H bonds are to be underlined. If the number is not shown in registered the same as the surrendered bonds. the inscription, and if the security is paid If bonds registered in co-ownership form are in an amount exceeding its issue price, the presented with the request that the Series H agent should request the owner to write his bonds be registered differently from the social security number on the security. If the bonds surrendered, then the person signing security is in co-ownership form, the name Form PD 3253, the exchange subscription of the co-owner to whom payment is being form: made should be underlined, unless it is de (i) Must be the “principal co-owner”, termined that the funds of the other co i.e., the co-owner whose funds were used to owner were used to buy it and his social purchase the bonds being exchanged, and security account number is furnished. The (ii) Must be named as owner or co-owner number should be written on the face of the on the Series H bonds to be issued. security below and to the left of the seal. (b) Paying agent stamps. (1) Type of (4) Where a subscription is submitted on stamp: The payment stamp, which may not behalf of a minor who is too young to com exceed 1yB inches in any dimension, should prehend the nature of the transaction, the show the following information in the ar Series H bond to be issued must be inscribed exactly as the surrendered bonds or in the rangement given: minor’s name alone. Paid $--------- (for recording amount paid). (5) The request for payment of each bond Name, location and code number1 assigned must be signed by the person requesting the by Federal Reserve Bank (subject to ab exchange, unless the bonds are processed breviation and arrangement by Federal Re under special endorsement, as provided in serve Bank). Department Circular No. 888, current D a te------------------- (for recording actual date revision. of payment). (b) Payment of bonds accepted in ex By ---------------------------------------- (for use by change. The redemption value shall be that agent to record initials or signature, codes, due in the month the agent receives and symbols as to who approved and/or made accepts the correctly completed and signed payment). subscription, Form PD 3253, together with Hand stamps may be requisitioned by agents any required additional cash payment. through the Federal Reserve Bank, or agents Should there be any errors in the subscrip may purchase their own stamps, provided the tion or in the cash payment, the bonds stamps conform exactly in size and design should not be stamped “PAID” or the to that prescribed by the Federal Reserve redemption values determined, nor shall the Bank, or as specifically approved by them. Form PD 3253 be processed until all such The number of stamps requisitioned should errors are finally corrected. All of the pro be kept to a minimum. To insure legible im ceeds payable on eligible bonds accepted in pressions, they should be replaced when an exchange transaction, plus or minus the worn. cash difference, as described in item (c) (2) Imprinting and filling in stamp: After below, must be remitted to the Federal the agent has determined that payment of Reserve Bank in payment for the Series H a security can be made, it should carefully bonds to be issued. Payment for these Series imprint the payment stamp on the front of H bonds may be made by credit to the the security in the unused space immediately Treasury Tax and Loan Account, if such to the left of the issue date and the issuing account is maintained by an agent. agent’s validating stamp. Payment stamps (c) Cash differences. If the redemption should be impressed as near to the issue and value exceeds an even $500 multiple, the sub validating data as possible without over scriber may add cash to equal the next $500 printing such data. No other stamps shall be multiple or he may be paid the amount in placed on the front of securities. Care should excess of the $500 multiple; for example, if then be taken to record legibly in the stamp the total redemption value of the accepted impression the correct amount and date bonds is $4,253.33, the agent must remit no less than $4,000 or no more than $4,500 to 1 The Federal Reserve Bank will assign code the Federal Reserve Bank in payment for numbers for any or all of an agent’s branches the Series H bonds. In the first instance, which such Bank approves for accounting the agent will pay the subscriber $253.33, in for paid bonds directly to that Bank or one the second, it will collect $246.67 when it accepts the subscription. of its branches. FEDERAL REGISTER, V O L . 33, N O . 2 0 9 — FRIDAY, O CTO B E R 25, 1968 RULES AND REGULATIONS 15830 notify the paying agent involved. Although the Department’s notice will usually be by letter, it may also be affected by a personal 13. Transmittal o f securities to Federal visit of a Secret Service agent. Such notifica Reserve Banks, (a) Form to be used. A tion by the Treasury is primarily designed standard transmittal letter, Form PD 2639, to enable the paying agent to (i) notify its will be supplied by the Federal Reserve Banks bonding company and (ii) assemble perti for submitting paid securities. Each such nent information concerning the transaction letter will be preprinted to show the agent’s for presentation during the Department’s name, location and assigned code number, investigation. and, if so prearranged, the name and address (2) Examination and determination of lia of the correspondent bank through which bility. Upon completion of the investigation, settlement is to be made. Each agent and the Treasury shall examine the results those of its branches accounting separately thereof for the purpose of determining for its paid bonds, should, therefore, obtain whether or not the agent may be relieved of and use ONLY those transmittal letters liability for any loss that may have resulted, which show their own names, locations and and the agent will be advised of the Treas code numbers to assure proper credit for the ury’s determination. If the Treasury is un payment of fees. A separate transmittal let able to relieve the agent of Its liability, and ter must be prepared to cover each of the restitution from the forger has not been made and appears unlikely, the agent shall following: promptly reimburse the Treasury for the (i) Paper bonds of Series A-E paid in the loss. Reconsideration of a determination will same month for cash; be made in any case where the agent so re (ii) Series E card bonds and notes (which quests and presents additional evidence and may be combined) paid in the same month information regarding the transaction. for cash; 17. Claims on account of lost securities. If (iii) Series E paper bonds paid in the same mittal of securities paid on redemption-ex month on redemption-exchange for Series change. Series E bonds and Series J bonds a security paid by an agent is lost, stolen, or destroyed while in -the custody of the H bonds; paid by the agent on redemption-exchange (iv) Series E card bonds paid in the same for Series H bonds, when transmitted to the agent or while in transit to the Federal Re month on redemption-exchange for Series H Federal Reserve Bank, must also be accom serve Bank, the Treasury will consider the bonds; and panied by the duly completed subscription, agent’s claim for reimbursement of the (v) Series J bonds paid in the same month Form PD 3253, and by payment in full, or by amount paid on the missing security. Such on redemption-exchange for Series H bonds. evidence of credit to the Treasury Tax and claims shall be presented on Form PD 2517, (b) Completion o f form. A single letter Loan Account. These items should be banded obtainable from the Federal Reserve Bank. 18. Miscellaneous provisions, (a) Qualifi shall cover not more than 200 securities or together (not clipped, stapled, or pinned) so $900,000 (redemption value), whichever is that they will be received as a unit at the cation of branches. Qualification of an insti tution as an agent automatically qualifies its larger. Each letter shall be completed (by Federal Reserve Bank. typewriter) to show, in the appropriate 15. Securities sent to the Federal Reserve branches, wherever located. Such Institutions blocks on the Form PD 2639: Bank for processing and payment— (a) Re may cash securities at any U.S. military (i) The letter series may be left blank; demption of securities not payable by agents. installation upon agreement between the (ii) The date of the letter (month, day, Any redemption transaction which an agent Departments of the Treasury and of Defense. (b) Requalification. Where there has been year when securities are transmitted); cannot or does not wish to process should be (iii) The month during which securities forwarded, after certification of the request a change in the corporate title of the agent, were paid (show month and year); for payment', with supporting documents, if whether through change-of-name, merger, (iv) The total number of securities sub any, to the Federal Reserve Bank for consolidation, sale of assets, or In any other mitted (200 maximum); processing and payment. A paying agent, in manner, the agent should apply for requali (v) The total redemption value paid on forwarding securities, would be acting on fication to reflect such change. the securities submitted ($900,000 maxi (c) Evidence of authority. On and after behalf of the owners. Securities so forwarded mum) ; and should not be intermingled with securities the effective date of its qualification, a pay (vi) Type of transaction (Redemption A-E ing agent may appropriately announce or ad Paper, Redemption E Card/Notes, Exchange E paid by the Institution as agent. vertise its authority to cash bonds and notes (b) Redemption-exchange transactions not and make known Its authority to process for H bonds or Exchange J for H bonds). processed by agent. Any exchange subscrip 14. Settlement for an audit of paid securi exchanges of Series E and J bonds for Series tion an agent receives covering, In whole ties. (a) Settlement. The Federal Reserve H bonds. Such statements and notices Bank will make immediate settlement for the or in part, bonds which the agent Is not should not, directly or indirectly, encourage total redemption value of the paid securities authorized to process for payment under the encashment of the securities. Two illus as recorded on each transmittal letter. This the provisions of Department Circular No. trations of an acceptable type of statement settlement will be subject to adjustment 750, and these instructions, or bonds that for use by the agent in advertisements, or when the securities are audited by the De the agent chooses not to process for pay displays, are: partment of the Treasury. Federal Reserve ment even though it is authorized so to do, “We are an authorized agent for payment Banks may make settlement by crediting the must be sent separately (not combined with of U.S. Savings Bonds and U.S. Savings Notes reserve account of the agent or one of its those forwarded for redemption) to the Fed (Freedom Shares).” correspondents or by a check drawn on the eral Reserve Bank. On such transmittals, the “This bank (company, etc.) is authorized agent acts on behalf of the customers, not to pay U.S. Savings Bonds and U.S. Savings Treasurer of the United States. as agent for the Treasury Department, and Notes (Freedom Shares) and process Series (b) Audit and Adjustment. The Treasury payment may not be made by credit to the E and J bonds for exchange for Series H will audit transmittal letters and paid se Treasury Tax and Loan Account. The issue Bonds.” curities as promptly as possible. The Treasury date of the Series H bonds issued on exchange (d) Variations in inscription. Securities will in due course notify each agent, through will be the first day of the month the cor issued by the Armed Forces for their mem the Federal Reserve Bank, of any adjust rectly completed exchange application and bers may show the names of the owner, co ments required. Notices of adjustment will full payment are received by the Federal owners, or beneficiary, if any, without an include information that will enable the pay Reserve Bank. address. In such cases, the name and address ing agent to make the adjustments, If re 16. Losses resulting from payments.— (a) of the person to whom the security is mailed quired, with either the security owner or the General. Under the governing statute, i.e., is shown one or more lines below the inscrip payee. Adjustments required in amounts pre title 31, United States Code, section 757c(i), tion. Such addressee does not acquire any viously credited to the agent will be made by an agent cannot be relieved of liability for a right or additional rights in the security by the Federal Reserve Bank through the ac count previously credited. Agents with whom loss resulting from an erroneous payment virtue of the fact that the security was preliminary settlements are made by a check unless the Secretary of the Treasury can mailed to him. Accordingly, payment may drawn on the Treasurer of the United States make a determination that the loss resulted be made thereof only in the same manner will receive an additional check from, or be from no fault or negligence on the part of as if the addressee’s name and address did not appear on the security. required to make prompt payment to, the the agent. (b) Error in payment.— (1) Notification (e) Payment to minors. A minor owner or Federal Reserve Bank, according to the na and investigation. Whenever any case involv co-owner may not request payment of securi ture of the audit adjustment. The agent should, If it discovers any error, notify the ing the fraudulent redemption of securities ties if he is not of sufficient competency and comes to an agent’s attention, it should im understanding to comprehend the nature of Federal Reserve Bank immediately. (c) Timing of Transmittals. Transmittal mediately notify the nearest Secret Service his act. Because of individual variations, the letters may be sent to the Federal Reserve Office and the Chicago Office of the Bureau Department has not laid down any rule as to Bank each day or less frequently; Provided, of the Public Debt, 536 South Clark Street, the exact age at which a minor should be able to cash his securities. If the age of the however, That all paid securities on hand on Chicago, 111. 60605. Where such a transaction minor is such that in the opinion of the the last business day of the month must be comes to the Department’s attention, it will IX . I n s t r u c t io n s T for P r o c e s s in g r a n s a c t io n s forwarded not later than the next business day. Securities of different payment months should never be combined in the same letter. The Treasury would prefer that daily trans mittals not be sent when only a few securi ties are covered. (d) Record of Shipment. A record of the serial numbers and amount paid for each security transmitted should be retained in order that settlement may be made in the event the shipment is lost. For that purpose agents are authorized to microfilm the front and back of the securities they pay. Such film records must be kept confidential and prints therefrom may be made only after receipt of permission of the Treasury or a Federal Reserve Bank. (e) Packing and Shipment. Paid securities should be prepared and shipped in the man ner prescribed by the Bank. The original and appropriate copies of the transmittal letter and the securities covered thereby should be banded together (not clipped, stapled, or pinned) and forwarded to the Federal Re serve Bank. (f) Special instructions relating to trans FEDERAL REGISTER, V O L . 33 , N O . 2 0 9 — FR IDA Y, O C TO B E R 2 5 , 1968 RULES AND REGULATIONS paying agent the child should ordinarily be Bond Act, as amended, 49 Stat. 21, as able to request payment for himself or, in amended; 31 U.S.C. 757c. cases of doubt, the agent may require an Subpart A — General Information interview with the minor. (f) Additional advice. Requests for addi § 322.0 Applicability o f regulations. tional advice, clarification of the regulations The regulations in this part govern the or these instructions, etc., should generally be referred to the Federal Reserve Bank manner of accounting for losses to the through which the agent secured its qualifi United States of America resulting from cation. the redemption of U.S. Savings Bonds [s e a l ] Joh n K. C a r lo c k , Fiscal Assistant Secretary. [F.R. Doc. 68-13013; Filed, Oct. 24, 1968; 8:45 a.m.] PART 322— M A N N E R OF ACCO U N T IN G FOR LOSSES RESULTING FROM THE REDEMPTION OF UNITED STATES SA V IN G S BONDS A N D UNITED STATES SA V IN G S NOTES (FREEDOM SHARES) The regulations set forth in Treasury Department Circular No. 751, Second Re vision, dated August 1, 1947 (31 CFR, Part 322), have been further revised and amended as shown below. The changes were effected under authority of section 22 of the Second Liberty Bond Act, as amended (49 Stat. 21, as amended; 31 U.S.C. 757c). This revision was effected pursuant to 5 U.S.C. 301. Notice and public procedures thereon are unneces sary as public property and contracts are involved. Dated: October 18,1968. [ seal ] J ohn K . C arlock , Fiscal Assistant Secretary. Treasury Department Circular No. 751, Second Revision, dated August 1, 1947 (31 CFR, Part 322), entitled; “Replace ment out of the Fund Established by the Government Losses in Shipment Act, as Amended, of Any Losses Resulting from Payments Made in Connection with the Redemption of United States Savings Bonds and Armed Forces Leave Bonds,” is hereby retitled and otherwise amended to delete reference therein to Armed Forces Leave Bonds and to include U.S. Savings Notes (Freedom Shares), and issued as a Third Revision, as follows: Applicability of regulations. 322.1 Report of erroneous payment. S u b p a rt B— R eport o f Loss S u b p a rt C— P rocedure fo r In v estig a tio n o f Loss 322.2 322.3 322.4 Action by Treasury. Use of United States Secret Service. Opportunity to present evidence. 322.5 Advice of final loss. S u b p a rt D— D eterm in ation o f J.oss Su b p a rt E— Certification o f S ign a tu re s 322.6 Certification of signatures. S u b p a rt F— R ep lacem en t o f Losses Out o f Fund 322.7 Replacement and recovery in connec tion with losses. S u b p a rt G — M iscella n eo u u s 322.8 Supplements, amendments, etc. ATn*HORiTY: The provisions of this Part 322 issued under sec. 22 of the Second Liberty Subpart B— Report of Loss § 322.1 Report o f erroneous .payment. (a) By qualified paying agent. Upon discovery of an erroneous or unauthor ized payment by a qualified paying agent, immediate report thereof should be made to the Federal Reserve Bank of the district. The payments so reported to, or otherwise discovered by, a Federal Reserve Bank, shall be adjusted, so far as possible, between the Federal Reserve Bank and the paying agent concerned. If no such adjustment is possible, or if the error in payment is discovered after the account of the Treasurer of the United States has been charged, an im mediate report thereof shall be made by the Federal Reserve Bank to the Bu reau of the Public Debt, Division of Loans and Currency Branch, 536 South Clark Street, Chicago, 111. 60605. (b) By Treasurer of the United States and Federal Reserve Bank or Branch. Upon discovery of an erroneous or un authorized payment by the Office of the Treasurer of the United States or by a Federal Reserve Bank or Branch, imme diate report thereof shall be made by such agency to the Bureau of the Public Debt, Division of Loans and Currency Branch, 536 South Clark Street, Chicago, 111. 60605. Subpart C— Procedure for Investi gation of Loss § 322.2 S u b p a rt A — G e n e ra l In fo rm ation Sec. 322.0 and U.S. Savings Notes (Freedom Shares) (a) by any bank or other finan cial institution duly qualified as a paying agent under Treasury Department Cir cular No. 750, or any revision thereof (Part 321 of this chapter), (b) by the Treasurer of the United States, and (c) by any Federal Reserve Bank or Branch, as fiscal agent of the United States. Action l>y Treasury. Following receipt of the report of an erroneous payment, or upon discovery from its records that an erroneous pay ment has occurred, the Department of the Treasury shall notify, unless such action is deemed unnecessary, the agency through which the redemption was effected, identifying the securities, and furnishing appropriate details and instructions. The Department shall de termine whether or not adjustment may be effected with the persons involved in the erroneous payment. § 322.3 Use o f United States Secret Serv ice. The Department of the Treasury, and, in appropriate cases, Federal Reserve Banks, as fiscal agents of the United States, may request the U.S. Secret Serv 15831 ice to investigate losses and to assist in the recovery of improper payments. The Treasurer of the United States, the Fed eral Reserve Banks, and qualified paying agents shall be expected to cooperate to the fullest extent therewith. § 322.4 Opportunity to present evidence. The paying agent, the Treasurer of the United States, or the Federal Reserve Bank or Branch, involved in any erro neous or unauthorized payment shall be given during the course of the investiga tion, or thereafter prior to a determi nation of final loss, every opportunity to present the full facts relating to the payment. Subpart D— Determination of Loss § 322.5 Advice o f final loss. Upon completion of the investigation, and after consideration of the results thereof, the Department of the Treasury shall advise the agency through which the payment occurred: (a) That no final loss to the United States has occurred, and, accordingly, that it is relieved from liability therefor] or that no claim for reimbursement shall be made unless and until a loss has been sustained: or (b) That while a final loss to the United States has occurred, it is not re quired to make reimbursement therefor as the Secretary of the ^Treasury, or his delegate, has determined that such loss resulted from no fault or negligence on the pari of such agency; or (c) That a final loss to the United States has occurred, and that as the Sec retary of the Treasury, or his delegate, has been unable to make an affirmative finding that such loss resulted from no fault or negligence on part of such agency, reimbursement must be promptly made, except where credit for the pay ment had not theretofore been extended. Subpart E— Certification of Signatures § 322.6 Certification o f signatures. The regulations in this part shall, to the extent appropriate, apply to losses resulting from payments made in reli ance on erroneous certifications of sig natures to any requests for payment of savings bonds and savings notes by an officer or designated employee of any financial institution or of the Postal Service authorized to certify such re quests. Subpart § 322.7 F— Replacement of Out of Fund Losses Replacement and recovery connection with losses. in Where a final loss has resulted from the redemption of a savings bond or sav ings note, and no reimbursement there for has been or will be made, such loss shall be subject to immediate replace ment out of the fund established by the Government Losses in Shipment Act, as amended. Any recovery or repayment thereafter received on account of such loss shall be credited to the fund. FEDERAL REGISTER, V O L . 33, N O . 2 0 9 — FRIDAY, O CTO BER 2 5 , 1968 15832 RULES AND REGULATIONS Subpart G — Miscellaneous § 322.8 Supplements, amendments, etc. The Secretary of the Treasury may at any time, or from time to time, supple ment, amend, or withdraw, in whole or in part, the provisions of this circular, or of any amendments or supplements thereto, information as to which will be furnished promptly to the Federal Re serve Banks and through such Banks, or directly, to eligible financial institutions qualified to make payments of savings bonds and savings notes under the provi sions of Treasury Department Circular No. 750, Second Revision (Part 321 of this chapter). [P. R. Doc. 68-13014; Piled, Oct. 24, 1968; 8:45 a.m.] FEDERAL REGISTER, V O L . 33 , N O . 2 0 9 — FR ID A Y , O C TO B E R 2 5 , 19 68
@FedFRASER