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FEDERAL RESERVE BANK
OF NEW YORK
Credit and Discount
Department
["Circular No. 7571
LDecember 21, 1926J
REDISCOUNT OF NOTES SECURED BY ADJUSTED SERVICE
CERTIFICATES
To all Incorporated Banks in the Second Federal Reserve District:
Under the provisions of the World War Adjusted Compensation Act, adjusted service certificates
shall be dated as of the 1st day of the month in which the applications for such certificates are filed,
but in no case before January 1, 1925. Banks are authorized to make loans on the security of such
adjusted service certificates, but not before the expiration of two years after the date of the certificate.
Only the veteran named in the certificate can lawfully obtain a loan on his adjusted service certificate and neither the beneficiary nor any other person than the veteran has any rights in this
Respect.
LOANS ON ADJUSTED SERVICE CERTIFICATES
Any national bank or any bank or trust company incorporated under the laws of any State,
territory, possession or the District of Columbia, hereinafter referred to as any "bank", is authorized to loan to any veteran upon his promissory note secured by his adjusted service certificate,
(with or without the consent of the beneficiary thereof) any amount not in excess of the loan value
of the certificate at the date the loan is made. Each certificate contains on its face a table for determining the loan value of the certificate.
The United States Veterans' Bureau has prepared a form of note for use in this connection and
is printing a supply of such forms for distribution to the banks. The regulations of the Bureau provide that the form of notes used in making loans secured by adjusted service certificates should substantially follow the form prepared by the Bureau. The official form provided by the Bureau should,
therefore, be used whenever possible;. When it is not possible to use this form the bank should use a
form substantially the same as that provided by the Veterans' Bureau, a sample copy of which is
enclosed herewith.
Any bank making a loan on an adjusted service certificate is required by the regulations of the
United States Veterans' Bureau promptly to notify the Bureau of the name of the veteran, the A—
number shown immediately after the name, the number of the certificate and the amount and date of
the loan.
Any bank holding a note secured by an adjusted service certificate may sell the note to any bank
authorized to make a loan to a veteran and deliver the certificate to such bank.
In case a note secured by an adjusted service certificate is sold, discoimted or rediscounted, the
bank making the transfer is required by law to notify the veteran promptly by mail at his last known
post-office address.
No adjusted service certificate is negotiable or assignable, or may serve as security for a loan,
except as provided in Section 502 of the World War Adjusted Compensation Act, which is printed on
the face of each adjusted service certificate. Any negotiation, assignment or loan not made in accordance with the provisions of Section 502 of the World War Adjusted Compensation Act is void.
The law provides that the rate of interest which a bank may charge upon such loan shall not
exceed by more than 2% per annum the rate charged at the date of the loan for the discount of 90-day
commercial paper under Section 13 of the Federal Reserve Act by the Federal Reserve Bank of the
district in which the lending bank is located, (*see footnote). The regulations of the United States
Veterans' Bureau provide that, where a loan is made by a bank located in a territory or possession
*The Veterans' Bureau states that lending banks should not deduct interest in advance. Also that
the form for demand for payment printed on the back of certificates should not be filled out by the borrower
or by any bank, as this is for use of the beneficiary in case of death of veteran.
http://fraser.stlouisfed.org/
Federal Reserve Bank of St. Louis
not embraced in any Federal Reserve District, the rate of interest charged shall not exceed the legal
rate in such territory or possession; provided, however, that the interest charged on loans made outside the continental limits of the United States by a branch of a bank -whose head office is in a Federal
Reserve District will be governed by the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank of the district in which the parent bank is located. No charge, other than the interest allowed by law, may be made by the lending bank; since the act provides, under penalty, that such
hank shall not charge or collect, or attempt to charge or collect, directly or indirectly, any fee or other
compensation in respect of any loan made upon the security of an adjusted service certificate except the interest authorized by law. Any violation of this provision will make the loan void.
The Director of the United States Veterans' Bureau cannot lawfully make payment on any note
secured by an adjusted service certificate, unless the note when presented to him is accompanied by
an affidavit made by an officer of the bank which made the loan, before a Notary Public or other
officer designated for the purpose by regulation of the Director of the Veterans' Bureau, stating that
such bank has not charged or collected, or attempted to charge or collect directly or indirectly, any
fee or other compensation in respect of any loan made upon the security of an adjusted service
certificate by the bank to a veteran, except the interest authorized by law.
The Regulations of the United States Veterans' Bureau also require that such affidavit shall
slate:
(1) That the person who obtained the loan evidenced by such note is known to be the veteran
named in the adjusted service certificate securing such note;
(2) That the lending bank has notified the United States Veterans' Bureau that it has made a
loan to the veteran named in the certificate; and
(3) That the bank has notified the veteran by mail at his last known post-office address of any
sale, discount, or rediscount of such note.
The Regulations of the United States Veterans' Bureau also provide that in case the note was resold or rediscounted by any bank other than the lending bank, affidavit shall be made by a duly
authorized officer of such bank that proper notice of such resale or rediscount was promptly mailed
to the veteran at his last known address.
There is printed on the same piece of paper as the form of note prepared by the Veterans'
Bureau two forms of affidavits covering the above requirements; and the Regulations of the Veterans'
Bureau provide that the proper execution of the appropriate affidavit on such form will be considered
as a compliance with the requirements of the Vete rans' Bureau with respect to affidavits.
REDEMPTION OF CERTIFICATES BY THE DIRECTOR OF THE VETERANS' BUREAU
If the veteran does not pay the loan at its maturity, the bank holding the note and adjusted
service certificate may at any time after the maturity of the loan, but not before the expiration of six
months after the loan was made, present them to the Director of the Veterans' Bureau. The Director may in his discretion accept the certificate and note and pay the bank in full satisfaction of its
claim, the amount of the unpaid principal due it, and the unpaid interest accrued at the rate fixed in
the note, up to the date of the check issued to the bank.
The Regulations of the Veterans' Bureau state that it will be the policy of the Bureau to redeem
all loans made in accordance with the law and regulations made pursuant thereto, when such loans
are made in good faith to the veteran to whom the certificate was issued, except that where the note
is held by a bank for a period in excess of six months after the date of maturity, the discretion
authorized by law may be invoked and redemption refused.
If the veteran dies before the maturity of the loan, the amount of unpaid principal and unpaid
interest accrued up to the date of his death immediately becomes due and payable. In such case, or
if the veteran dies on the date the loan matures or within six months thereafter, the bank holding
the note and the certificate shall, upon notice of the death of the veteran, present them to the Director of the Veterans' Bureau, who shall thereupon pay the bank in full satisfaction of its claim the
amount of the unpaid principal and unpaid interest at the rate fixed in the note accrued up to the
date of the check issued to the bank; except that if. prior to the payment, the bank is notified by the
Director of the death of the veteran and fails to present the certificate and note to the Director within
15 days after such notice, interest shall be paid only up to the 15th day after such notice.
tf the veteran has not died before the maturity of the certificate and has failed to pay his note to
The bank holding the note and certificate, such bank at the maturity of the certificate must present
ihe note and certificate to the Director of the Veterans' Bureau, who is thereupon required by law
o pay to the bank in full satisfaction of its claim the amount of the unpaid principal and unpaid
interest ;it tho rate fixed in the note accrued up to the date of the maturity of the certificate.
REDISCOUNTS WITH FEDERAL RESERVE BANKS
Upon the indorsement of any bank, which shall be deemed a waiver of demand, notice and protest by such bank as to its own indorsement exclusively, and subject to regulations to be prescribed
by the Federal Reserve Board, any such note secured by an adjusted service certificate and held by
a bank is made eligible for discount or rediscount by the Federal Reserve Bank of the Federal Reserve
District in which such bank is located, whether or not the bank offering the note for discount or rediscount is a member of the Federal Reserve System and whether or not it acquired the note in the
first instance from the veteran or acquired it by transfer upon the indorsement of any other bank;
provided that at the time of discount or rediscount such note has a maturity not in excess of nine
months, exclusive of days of grace, and complies in all other respects with the provisions of the law,
ihe regulations of the United States Veterans' Bureau, and the regulations of the Federal Reserve
l.oard.
ELIGIBILITY FOR REDISCOUNT
In order to be eligible for rediscount at a Federal Reserve Bank, any such note must:
1. Arise out of a loan made by a bank to a veteran in full compliance Avith the provisions of
the World War Adjusted Compensation Act and the regulations of the United States Veterans'
Bureau;
2. Be secured by the adjusted service certificate issued 1o the maker, which certificate must accompany the note;
3. Be held by the offering bank in its own right at the time it is offered for rediscount;
4. Be negotiable in form and otherwise in the form approved by the United States Veterans'
Bureau;
5. Have a maturity at the time of rediscount not in excess of nine months, exclusive of days of
grace;
6. Evidence a loan the amount of which does not exceed the loan value of the adjusted service
certificate for the year in which such loan was made;
7. Be payable with interest accruing after the date of the note at a rate stated in the face of the
note, which rate shall not exceed by more than 2 per cent per annum the rate charged at the date
of the loan for the discount of 90-day commercial paper by the Federal Reserve Bank of the Federal
Reserve District in which the lending bank is located;
8. Bear the endorsement of the bank offering it for rediscount, which endorsement shall be
deemed a waiver of demand, notice and protest by such bank as to its own endorsement exclusively;
9. Be accompanied by the evidence of eligibility required by the Regulations of the Federal
Reserve Board and by such other evidence of eligibility as the Federal Reserve Bank may require;
10. Be accompanied by such affidavits and other evidence as would be required by the Veterans'
Bureau in the event the Federal Reserve Bank should apply to the Veterans' Bureau for payment of
the note; and
11. Comply in all other respects with the requirements of the law and of the regulations of the
Federal Reserve Board.
INELIGIMLITY AS COLLATERAL TO A BANK'S OWN NOTE
Neither a member bank nor a non-member bank may borrow from a Federal Reserve Bank on
its own promissory note secured by notes of veterans in turn secured by adjusted service certificates;
because neither the Federal Reserve Act nor the the World War Adjusted Compensation Act authorizes the Federal Reserve Banks to make such loans. That provision of Section 13 of the Federal
Reserve Act which authorizes Federal Reserve Banks to make loans to member banks for periods not
in excess of 15 days on the promissory notes of such member banks requires that such notes must be
secured by paper eligible for rediscount or for purchase by Federal Reserve Banks under the provisions of the Federal Reserve Act or by bonds or notes of the United States. Section 502 of the
World War Adjusted Compensation Act which authorizes Federal Reserve Banks to rediscount notes
secured by adjusted service certificates is not made a part of the Federal Reserve Act.
METHOD AND TERMS OF REDISCOUNT
Prior to the rediscount of any paper a certified copy of a resolution passed by the board of
directors of the offering bank with the Seal of the bank affixed, authorizing the proper officials to
rediscount, must be filed with the Federal Reserve Bank. It will not be necessary for member banks
which have filed such a resolution in connection with rediscounts to file any additional resolution in
connection with notes secured bv adjusted service certificates.
Before rediscounting any such notes for any non-member bank, this bank will require such nonmember bank to furnish to it such information as this bank may consider necessary in order to satisfy
itself as to the condition of such bank and the advisability of making rediscounts for it. Blank applications for rediscount will be supplied by this bank upon request.
All such notes offered for rediscount should be listed on the application form provided and the
application signed by a duly authorized officer. Full information must be furnished as provided on
the form.
Upon acceptance for rediscount b}r the Federal Reserve Bank the proceeds of
credited to the reserve account of the bank, in the case of a member bank, and, in
member bank, the Federal Reserve Bank will remit by check or, upon request, will
of a designated member bank located in this Federal Reserve District for the use
non-member.
such notes will be
the case of a noncredit the account
and credit of the
The rate of discount deducted by this bank will be the same as that deducted by it in rediscounting 90 day notes issued for commercial purposes.
COLLECTION OF REDISCOUNTED NOTES AT MATURITY
In the case member banks, the usual procedure will be to forward for collection all notes secured
by adjusted service certificates to the banks discounting such notes, several days in advance of their
maturity. Such notes will be charged to the member bank's account when due without notice, it being
assumed that on the maturity date the membei bank will provide funds in excess of its required reserve
to meet the notes.
In the case of non-member banks, notice of approaching maturity will be forwarded to the discounting banks approximately ten days in advance of the maturity of each note, and the discounting
banks will be required to place funds in the hands of the Federal Reserve Bank to pay them, which
funds must be available on the date of maturity of the notes.
FURTHER INFORMATION
ENCLOSED
For your information there are enclosed the following:
1. The World "War Adjusted Compensation Act. Sections 501, 502 and 504 deserve the special
attention of banks which contemplate making loans on the security of adjusted service certificates.
2. The Act of July 3, 1926, amending the World War Adjusted Compensation Act. Section 4 (a)
and Section 503 as amended by this Act deserve special attention.
3. The Regulations of the Veterans' Bureau with respect to loans on adjusted service certificates.
4. The Regulations of the Federal Reserve Board with respect to the rediscount of notes secured
by adjusted service certificates.
5. A sample copy of the form of note and affidavits, approved by the United States Veterans'
Bureau. A supply of these forms will be provided by the Veterans' Bureau- and any incorporated bank
may obtain a supply from the United States Veterans' Bureau, Washington, D. C, or from this
bank, upon request.
6. A proposed form of resolution to be adopted by non-member banks authorizing the endorsement
and rediscount of such notes.
7. Copy of form of application to this Federal Reserve Bank for rediscount of such notes.
Additional copies of this form will be supplied by this bank, upon request.
Very truly yours,
B E N J . STRONG,
Governor.
[PUBLIC—No. 120—68TH CONGRESS.]
[H. It. 7959.]
An Act To provide adjusted compensation for veterans of the
World War, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United /States of America in Congress assembled,
TITLE I.—DEFINITIONS.
SECTION 1 This Act may be cited as the " World War Adjusted
Compensation Act."
SEC. 2. As used in this Act—
(a) The term " veteran " includes any individual, a member of
the military or naval forces of the United States at any time after
April 5, 1917, and before November 12, 1918; but does not include
(1) any individual at any time during such period or thereafter
separated from such forces under other than honorable conditions,
(2) any conscientious objector who performed no military duty
whatever or refused to wear the uniform, or (3) any alien at any
time during such period or thereafter discharged from the military
or naval forces on account of his alienage;
(b) The term "oversea service" means service on shore in
Europe or Asia, exclusive of China, Japan, and the Philippine
Islands; and service afloat, not on receiving ships; including in either
case the period from the date of embarkation for such service to
the date of disembarkation on return from such service, both dates
inclusive;
(c) The term "home service" means all service not oversea
service;
(d) The term " adjusted service credit" means the amount of the
credit computed under the provisions of Title I I ; and
(e) The term "person" includes a partnership, corporation, or
association, as well as an individual.
TITLE II.—ADJUSTED SERVICE CREDIT.
SEC. 201. The amount of adjusted service credit shall be computed by allowing the following sums for each day of active service, in excess of sixty days, in the military or naval forces of the
United States after April 5, 1917, and before July 1, 1919, as shown
by the service or other record of the veteran: $1.25 for each day of
oversea service, and $1 for each day of home service; but the amount
of the credit of a veteran who performed no oversea service shall
not exceed $500, and the amount of the credit of a veteran who
performed any oversea service shall not exceed $625.
SEC. 202. In computing the adjusted service credit no allowance
shall be made to—
(a) Any commissioned officer above the grade of captain in the
Army or "Marine Corps, lieutenant in the Navy, first lieutenant or
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first lieutenant of engineers in the Coast Guard, or passed assistant
surgeon in the Public Health Service, or having the pay and allowances, if not the rank, of any officer superior in rank to any of such
grades—in each case for the period of service as such;
(b) Any individual holding a permanent or provisional commission or permanent or acting warrant in any branch of the military
or naval forces, or (while holding such commission or warrant)
serving under a temporary commission in a higher grade—in each
case for the period of service under such commission or warrant
or in such higher grade sifter the accrual of the right to pay thereunder. This subdivision shall not apply to any noncommissioned
officer;
(c) Any civilian officer or employee of any branch of the military
or naval forces, contract surgeon, cadet of the United States Military
Academy, midshipman, cadet or cadet engineer of the Coast Guard,
member of the Reserve Officers' Training Corps, member of the
Students' Army Training Corps (except an enlisted man detailed
thereto), Philippine Scout, member of the Philippine Guard, member of the Philippine Constabulary, member of the National Guard
of Hawaii, member of the insular force of the Navy, member of
the Samoan native guard and band of the Navy, or Indian Scout—
in each case for the period of service as such;
(d) Any individual entering the military or naval forces after
November 11, 1918—for any period after such entrance;
(e) Any commissioned or warrant officer performing home service not with troops and receiving commutation of quarters or of
subsistence—for the period of such service;
(f) Any member of the Public Health Service—for any period
during which he was not detailed for duty with the Army or the
Navy;
(g) Any individual granted a farm or industrial furlough—for
the period of such furlough;
(h) Any individual detailed for work on roads or other construction or repair work—for the period during which his pay
was equalized to conform to the compensation paid to civilian employees in the same or like employment, pursuant to the provisions
of section 9 of the Act entitled "An Act making appropriations for
the service of the Post Office Department for the fiscal year ending
June 30, 1920, and for other purposes," approved February 28,
1919; or
(i) Any individual who was discharged or otherwise released
from the draft—for the period of service terminating with such
discharge or release.
SEC. 203. (a) The periods referred to in subdivision (e) of section
202 may be included in the case of any individual if and to the
extent that the Secretary of War and the Secretary- of the Navy
jointly find that such service subjected such individual to exceptional hazard. A full statement of all action under this subdivision
shall be included in the reports of the Secretary of War and the.
Secretary of the Navy required by section 307.
(b) In computing the credit to any veteran under this title
effect shall be given to all subdivisions of section 202 which are
applicable.
IPUB. 120.]
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(c) If part of the service is oversea service and part is home
service, the home service shall first be used in computing the sixty
days' period referred to in section 201.
*(d) For the purpose of computing the sixty days' period referred
to in section 201, any period of service after April 5, 1917, and
before July 1, 1919, in the military or naval forces in any capacity
may be included, notwithstanding allowance of credit for such
period, or a part thereof, is prohibited under the provisions of
section 202, except that the periods referred to in subdivisions (b),
(c), and (d) of that section shall not be included.
(e) For the purposes of section 201, in the case of members of
the National Guard or of the National Guard Reserve called into
service by the proclamation of the President dated July 3, 1917, the
time of service between the date of call into the service as specified in
such proclamation and August 5, 1917, both dates inclusive, shall be
deemed to be active service in the military or naval forces of the
United States.
TITLE III.—GENERAL PROVISIONS.
BENEFITS GRANTED VETERANS.
SEC. 301. Each veteran shall be entitled:
(1) To receive "adjusted service pay" as provided in Title IV,
if the amount of his adjusted service credit is $50 or less;
(2) To receive an " adjusted service certificate " as provided in
Title V, if the amount of his adjusted service credit is more than $50.
APPLICATION BY VETERAN.
SEC. 302. (a) A veteran may receive the benefits to which he is
entitled by filing an application claiming the benefits of this Act
with the Secretary of War, if he is serving in, or his last service
was with, the military forces; or with the Secretary of the Navy, if
he is serving in, or his last service was with, the naval forces.
(b) Such application shall be made on or before January 1, 1928,
and if not made on or before such date shall be held void.
(c) An application shall be made (1) personally by the veteran,
or (2) in case physical or mental incapacity prevents the making
of a personal application, then by such representative of the veteran
and in such manner as the Secretary of War and the Secretary of
the Navy shall jointly by regulation prescribe. An application
made by a representative other than one authorized by any such
regulation shall be held void.
(d) The Secretary of War and the Secretary of the Navy shall
jointly make any regulations necessary to the efficient administration
of the provisions of this section.
TRANSMITTAL OF APPLICATION.
SEC. 303. (a) As soon as practicable after the receipt of a valid
application the Secretary of War or the Secretary of the Navy, as
the case may be, shall transmit to the Director of the United States
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Veterans' Bureau (hereinafter in this Act referred to as the
" Director ") the application and a certificate setting forth—
(1) That the applicant is a veteran;
(2) His name and address;
(3) The date and place of his birth; and
(4) The amount of his adjusted service credit together with the
facts of record in his department upon which such above conclusions
are based.
(b) Upon receipt of such certificate the Director shall proceed to
extend to the veteran the benefits provided for in Title IV or V.
PUBLICITY.
SEC. 304. (a) The Director shall, as soon as practicable after the
enactment of this Act, prepare and publish a pamphlet or pamphlets
containing a digest and explanation of the provisions of this Act;
and shall from time to time thereafter prepare and publish such
additional or supplementary information as may be found necessary.
(b) The publications provided for in subdivision (a) shall be
distributed in such manner as the Director may determine to be
most effective to inform veterans and their dependents of their
rights under this Act.
STATISTICS.
SEC. 305. Immediately upon the enactment of this Act the
Secretary of War and the Secretary of the Navy shall ascertain
the individuals who are veterans as defined in section 2, and, as
to each veteran, the number of days of oversea service and of home
service, as defined in section 2, for which he is entitled to receive
adjusted service credit, and their findings shall not be subject to
review by the General Accounting Office, and payments made by
disbursing officers of the United States Veterans' Bureau made in
accordance with such findings shall be passed to their credit.
ADMINISTRATIVE REGULATIONS.
SEC. 306. Any officer charged with any function under this Act'
shall make such regulations, not inconsistent with this Act, as may
be necessary to the efficient administration of such function.
REPORTS.
SEC. 307. Any officer charged with the administration of arnr part
of this Act shall make a full report to Congress on the first Monday
of December of each year as to his administration thereof.
EXEMPTION FROM ATTACHMENT AND TAXATION.
SEC. 308. No sum payable under this Act to a veteran or his
dependents, or to his estate, or to any beneficiary named under Title
V, no adjusted service certificate, and no proceeds of any loan made
on such certificate, shall be subject to attachment, levy, or seizure
under any legal or equitable process, or to National or State taxation.
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UNLAWFUL FEES.
SEC. 309. Any person who charges or collects, or attempts to
charge or collect, either directly or indirectly, any fee or other
compensation for assisting in any manner a veteran or his dependents
in obtaining any of the benefits, privileges, or loans to which he is
entitled under the provisions of this Act shall, upon conviction
thereof, be subject to a fine of not more than $500, or imprisonment
for not more than one year, or both.
TITLE IV.—ADJUSTED SERVICE PAY.
SEC. 401. There shall be paid to each veteran by the Director
(as soon as practicable after receipt of an application in accordance
with the provisions of section 302, but not before March 1, 1925),
in addition to any other amounts due such veteran in pursuance
of law, the amount of his adjusted service credit, if, and only if,
such credit is not more than $50.
Sic. 402. No right to adjusted service pay under the provisions
of this title shall be assignable or serve as security for any loan.
Any assignment or loan made in violation of the provisions of this
section shall be held void. Except as provided in Title VI, the
Director shall not pay the amount of adjusted service pay to any
person other than the veteran or such representative of the veteran
as he shall by regulation prescribe.
TITLE V.—ADJUSTED SERVICE CERTIFICATES.
SI:C. 501. The Director, upon certification from the Secretary of
War or the Secretary of the Navy, as provided in section 303, is
hereby directed to issue without cost to the veteran designated
therein a non-participating adjusted service certificate (hereinafter
in this title referred to as a " certificate ") of a face value equal to
the amount in dollars of 20-year endowment insurance that the
amount of his adjusted service credit increased by 25 per centum
would purchase, at his age on his birthday nearest the date of the
certificate, if applied as a net single premium, calculated in
accordance with accepted actuarial principles and based upon the
American Experience Table of Mortality and interest at 4 per
centum per annum, compounded annually. The certificate shall be
dated, and all rights conferred under the provisions of this title
shall take effect, as of the 1st day of the month in which the
application is filed, but in no case before January 1, 1925. The
veteran shall name the beneficiary of the certificate and may from
time to time, with the approval of the Director, change such
beneficiary. The amount of the face value of the certificate
(except as provided in subdivisions (c), (d), (e), and (f) of section
502) shall be payable out of the fund created by section 505 (1) to
the veteran twenty years after the date of the certificate, or (2) upon
the death of the veteran prior to the expiration of such twenty-year
period, to the beneficiary named; except that if such beneficiary
dies before the veteran and no new beneficiary is named, or if
the beneficiary in the first instance has not yet been named, the
amount of the face value of the certificate shall be paid to the
estate of the veteran. If the veteran dies after making application
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under section 302, but before January 1, 1025. then the amount of
the face value of the certificate shall be paid in the same manner
as if his dearh had occurred after January 1, 1925.
i.o.vx rruviu:<;K.s.
SEC. 502. (a) A loan may be made to a veteran upon his adjusted
service certificate only in accordance with the provisions of this
section.
(b) Any national bank, or any bank or trust company incorporated under the laws of any State, Territory, possession, or the
District of Columbia (hereinafter in this section called "bank"), is
authorized, after the expiration of two years after the date of the
certificate, to loan to any veteran upon his promissory note secured
by his adjusted service certificate (with or without the consent of
the beneficiary thereof) any amount not in excess of the loan basis
(as defined in subdivision (g) of this section) of the certificate.
The rate of interest charged upon the loan by the bank shall not
exceed, by more than 2 per centum per annum, the rate charged at
the date of the loan for the discount of 90-day commercial paper
under section 13 of the Federal Reserve Act by the Federal reserve
bank for the Federal reserve district in which the bank is located.
Any bank holding a note for a loan under this section secured by
a certificate (whether the bank originally making the loan or a
bank to wrhich the note and certificate have been transferred) may
sell the note to, or discount or rediscount it with, any bank
authorized to make a loan to a veteran under this section and
transfer the certificate to such bank. Upon the indorsement of any
bank, which shall be deemed a waiver of demand, notice, and protest
by such bank as to its own indorsement exclusively, and subject to
regulations to be prescribed by the Federal Reserve Board, any such
note secured by a certificate and held by a bank shall be eligible
for discount or rediscount bjr the Federal reserve bank for the
Federal reserve district in which the bank is located. Such note
shall be eligible for discount or rediscount whether or not the bank
offering the note for discount or rediscount is a member of the
Federal Reserve System and whether or not it acquired the note in
the first instance from the veteran or acquired it by transfer upon
the indorsement of any other bank. Such note shall not be eligible
for discount or rediscount unless it has at the time of discount or
rediscount a maturity not in excess of nine months exclusive of
days of grace. The rate of interest charged by the Federal reserve
bank shall be the same as that charged by it for the discount or
rediscount of 90-day notes drawn for commercial purposes. The
Federal Reserve Board is authorized to permit, or on the affirmative
vote of at least five members of the Federal Reserve Board to
require, a Federal reserve bank to rediscount, for any other
Federal reserve bank, notes secured by a certificate. The rate of
interest for such rediscounts shall be fixed by the Federal Reserve
Board. In case the note is sold, discounted, or rediscounted the
bank making the transfer shall promptly notify the veteran by
mail at his last known post-office address.
(c) If the veteran does not pay the principal and interest of the
loan upon its maturity, the bank holding the note and certificate
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7
may, at any time after maturity of the loan but not before the
ex pi rat ion of six months after the loan was made, present them
to the Director. The Director may, in his discretion, accept the
certificate and note, cancel the note (but not the certificate), and pay
the bank, in full satisfaction of its claim, the amount of the unpaid
principal due it, and the unpaid interest accrued, at the rnte fixed
in the note, up to the date of the check issued to the bank. The
Director shall restore to the veteran, at any time prior to its
maturity, any certificate so accepted, upon receipt from him of an
amount equal to the sum of (1) the amount paid by the United
.States to the bank in cancellation of his note, plus (2) interest on
such amount from the time of such payment to the date of such
receipt, at 6 per centum per annum, compounded annually.
(d) If the veteran fails to redeem his certificate from the
Director before its maturity, or before the death of the veteran,
the Director shall deduct from the face value of the certificate (as
determined in section 501) an amount equal to the sum of (1) Die
amount paid by the United States to the bank on account of the
noic of the veteran, plus (2) interest on such amount from the tir.<e
of such payment to the date of maturity of the certificate or of the
death of the veteran, at the rate of G per centum per annum, compounded annually, and shall pay the remainder in accordance with
the provisions of section 501.
(e) If the veteran dies before the maturity of the loan, the
amount of the unpaid principal and the unpaid interest accrued up
to the date of his death shall be immediately due and payable.
Jn such case, or if the veteran dies on the day the loan matures
or within six months thereafter, the bank holding the note and
certificate shall, upon notice of the death, present them to tho
Director, who shall thereupon cancel the note (but not the
certificate) and pay to the bank, in full satisfaction of its claim,
the amount of the unpaid principal and unpaid interest, at the
rate fixed in the note, accrued up to the date of the check issued to the
bank: except that if, prior to the payment, the bank is notified of
the death by the Director and fails to present the certificate and note
to the Director within fifteen days after the notice, such interest
shall be only up to the fifteenth day after such notice. The
Director shall deduct the amount so paid from the face value (as
determined under section 501) of the certificate and pay the
remainder in accordance with the provisions of section 501.
(f) If the veteran has not died before the maturity of the
certificate, and has failed to pay his note to the bank or the Federal
reserve bank holding the note and certificate, such bank shall, at
the maturity of the certificate, present the note and certificate to the
Director, who shall thereupon cancel the note (but not the certificate) and pay to the bank, in full satisfaction of its claim, the
amount of the unpaid principal and unpaid interest, at the rate
fixed in the note, accrued up to the date of the maturity of the
certificate. The Director shall deduct the amount so paid from the
face value (as determined in section 501) of the certificate and pay
the remainder in accordance with the provisions of section 501.
tjr) The loan basis of any certificate at any time shall, for the
purpose of this section, be an amount which is not in excess of 90
per centum of the reserve value of the certificate on the Last day of
8
[POT. 120.]
the current certificate year. The reserve value of a certificate on
the last day of any certificate year shall be the full reserve required
on such certificate, based on an annual Lvel net premium for twenty
years and calculated in accordance with the American Experience
Table of Mortality and interest at 4 per centum per annum, compounded annually.
(h) No payment upon any note shall be made under this section
by the Director to any bank, unless the note when presented to him
is accompanied by an affidavit made by an officer of the bank which
made the loan, rbefore a notary public or other officer designated for
the purpose bj regulation of the Director, and stating that such
bank has not charged or collected, or attempted to charge or collect,
directly or indirectly, any fee or other compensation (except interest
as authorized by this section) in respect of any loan made under
this section by the bank to a veteran. Any bank which, or director,
officer, or employee thereof who, does so charge, collect, or attempt
to charge or collect any such fee or compensation, shall be liable to
the veteran for a penalty of $100, to be recovered in a civil suit
brought by the veteran. The Director shall upon request of any
bank or veteran furnish a blank form for such affidavit.
SEC. 503. No certificate issued or right conferred under the provisions of this title shall, except as provided in section 502, be
negotiable or assignable or serve as security for a loan. Any negotiation, assignment, or loan made in violation of any provision of
this section shall be held void.
SEC. 504. Any certificate issued under the provisions of this title
shall have printed upon its face the conditions and terms upon
which it is issued and to which it is subject, including loan values
under section 502.
ADJUSTED SERVICE CERTIFICATE FUND.
SEC. 505. There is hereby created a fund in the Treasury of the
United States to be known as " The Adjusted Service Certificate
Fund ", hereinafter in this title called " fund ". There is hereby
authorized to be appropriated for each calendar year (beginning
with the calendar year 1925 and ending with the calendar year
1946) an amount sufficient as an annual premium to provide for
the payment of the face value of each adjusted service certificate in
twenty years from its date or on the prior death of the veteran,
such amount to be determined in accordance with accepted actuarial
principles and based upon the American Experience Table of
Mortality and interest at 4 per centum per annum, compounded
annually. The amounts so appropriated shall be set aside in the
fund on the first day of the calendar year for which appropriated.
The appropriation for the calendar year 1925 shall not be in excess
of $100,000,000.
SEC. 506. The Secretary of the Treasury is authorized to invest
and reinvest the moneys in the fund, or any part thereof, in interestbearing obligations of the United States and to sell such obligations
of the United States for the purposes of the fund. The interest on
and the proceeds from the sale of any such obligations shall become
a part of the fund.
[PUB.
120.]
9
SEC. 507. All amounts in the fund shall be available for payment,
by the Director, of adjusted service certificates upon their maturity
or the prior death of the veteran, and for payments under section 502
to banks on account of notes of veterans.
TITLE VI.—PAYMENTS TO VETERAN'S DEPENDENTS.
ORDER OIT PREFERENCE.
SEC. 601. (a) If the veteran lias died before making application
under section 302, or, if entitled to receive adjusted service pay,
has died after making application but before he has received
payment under Title IV, then the amount of his adjusted service
credit shall (as soon as practicable after receipt of an application
in accordance with the provisions of section 604, but not "before
March 1, 1025) be paid to his dependents, in the following order of
preference:
(1) To the widow or widowerT if unmarried;
(2) If no unmarried widow or widower, then to the children,
share and share alike;
(3) If no unmarried widow or widower, or children, then to
the mother;
(4) If no unmarried widow or widower, children, or mother,
then to the father.
(b) For the purposes of this section payments made under
paragraph (2) of subdivision (g) of section 301 of the War Risk
Insurance Act shall not be considered payments made by the United
States on account of the death of the veteran.
DEPENDENCY.
SEC. 602. (a) No payment shall be made to any individual under
this title unless at the time of the death of the veteran such
individual was dependent.
(b) For the purposes of this section:
(1) A child of the veteran shall be presumed to- have been,
dependent upon him at the time of his death if at such time such
child was under 18 years of age;
(2) The widow or widower shall be presumed to have been
dependent upon the veteran upon showing by them, respectively,
the marital cohabitation; the father and mother, respectively, shall
submit under oath a statement of the dependency, to be filed with
the application.
PAYMENT IN INSTALLMENTS.
SEC. 603. The payments authorized by section 601 shall be made
in ten equal quarterly installments, unless the total amount of the
payment is less than $50, in which case it shall be paid on the first
installment date. Xo payments under the provisions of this title
shall be made to the heirs or legal representatives of any dependents
entitled thereto who die before receiving all the installment
payments, but the remainder of such payments shall be made to the
dependent or dependents in the next order of preference under
section 601. All payments under this title shall be made by the
Director.
10
[PUB.
120.]
APPLICATION BY DEPENDENT.
SEC. 604. (a) A dependent may receive the benefits to which he is
entitled under this title by filing an application therefor with the
Secretary of War, if the last service of the veteran was with the
military forces, or with the Secretary of the Navy, if his last
service was with the naval forces.
(b) Applications for such benefits, whether vested or contingent,
shall be made by the dependents of the veteran on or before January
1, 1928; except that in case of the death of the veteran during the
six months immediately preceding such date the application shall
be made at any time within six months after the death of the
veteran. Payments under this title shall be made only to dependents
who have made application in accordance with the provisions of this
subdivision.
(c) An application shall be made (1) personally by the dependent,
or (2) in case physical or mental incapacity prevents the making of
a personal application, then by such representative of the dependent
and in such manner as the Secretary of War and the Secretary of
the Navy shall jointly by regulation prescribe. An application
made by a representative other than one authorized by any such
regulation shall be held void.
(d) The Secretary of War and the Secretary of the Navy shall
jointly make any regulations necessary to the efficient administration of the provisions of this section.
TRANSMITTAL OF APPLICATION.
SEC. 605. (a) As soon as practicable after the receipt of a valid
application the Secretary of War or the Secretary of the Navy, aa
the case may be, shall transmit to the Director the application and
a certificate setting forth—
(1) The name and address of the applicant;
(2) That the individual upon whom the applicant bases his claim
to payment was a veteran;
(3) The name of such veteran and the date and place of his
birth; and
(4) The amount of the adjusted service credit of the veteran,
together with the facts of record in the department upon which
such above conclusions are based.
(b) Upon receipt of such certificate the Director shall proceed
to extend to the applicant the benefits provided in this title if the
Director finds that the applicant is the dependent entitled thereto.
ASSIGNMENTS.
SEC. 606. No right to payment under the provisions of this title
shall be assignable or serve as security for any loan. Any assignment or loan made in violation of the provisions of this section
shall be held void. The Director shall not make any payments
under this title to any person other than the dependent or such
representative of the dependent as the Director shall by regulation
prescribe.
{POT. 120.
11
DEFIXITTOXS.
SEC. 607. As used in this Act—
(a) The term " dependent" means a widow, widower, child,
father, or mother;
(b) The term "child" includes (1) a legitimate child; (2) a
child legally adopted; (3) a stepchild, if a member of the veteran's
household; (4) an illegitimate child, but, as to the father only, if
acknowledged in writing signed by him, or if he has been judicially
ordered or decreed to contribute to such child's support, or has been
judicially decreed to be the putative father of such child; and
(c) The terms " father " and " mother " include stepfathers and
stepmothers, fathers and mothers through adoption, and persons
who have, for a period of not less than one year, stood in loco
parentis to the veteran at any time prior to the beginning of his
service.
TITLE VII.—MISCELLANEOUS PROVISIONS.
SEC. 701. The officers having charge of the administration of any
of the provisions of this Act are authorized to appoint such officers,
employing, and agents in the District of Columbia and elsewhere,
and to make such expenditures for rent, furniture, office equipment,
printing, binding, telegrams, telephone, law books, books of reference, stationery, motor-propelled vehicles or trucks used for official
purposes, traveling expenses and per diem in lieu of subsistence at
not exceeding $4 for officers, agents, and other employees, for the
purchase of reports and materials for publications, and for
other contingent and miscellaneous expenses, as may be necessary
efficiently to execute the purposes of this Act and as may be provided
for by the Congress from time to time. All such appointments
shall be made subject to the civil service laws. In all appointments
under this section preference shall, so far as practicable, be given
to veterans.
For the administration of the provisions of this Act, the President
may except from the operation of section 4c of the Act entitled
" An Act for making further and more effectual provision for the
national defense, and for other purposes," approved June 3, 1916,
as amended, or of any Act amendatory thereof or supplemental
thereto, not more than seven officers of the Army.
SEC. 702. Whoever knowingly makes any false or fraudulent
statement of a material fact in any application, certificate, or document made under the provisions of Title III, IV, V, or VI, or of
any regulation made under any such title, shall, upon conviction
thereof, be fined not more than $1,000, or imprisoned not more than
five years, or both.
SEC. 703. The Secretary of "War, the Secretary of the Navy, and
the Director shall severally submit in the manner provided by law
estimates of the amounts necessary to be expended in carrying out
such provisions of this Act as each is charged with administering,
and there is hereby authorized to be appropriated amounts sufficient
12
[POT-
120.]
to defray such expenditures. The Director shall also submit estimates for appropriations for the fund created by section 505.
F H GILLETT
Speaker of the House of Representatives.
ALBEKT B. CUMMINS
President pro tempore of the Senate.
I N THE HOUSE OF REPRESENTATIVES, U. S.,
May 17, 1924.
The House having proceeded, in pursuance of the Constitution, to
reconsider the bill (H. R. 7959) entitled "An Act to provide adjusted
compensation for the veterans of the World War, and for other purposes," returned to the House by the President of the United States,
With his objections thereto, with the message of the President returning the bill; and
RESOLVED, That the bill do pass, two-thirds of the House of
Representatives agreeing to pass the same.
Attest:
WM. TYLER PAGE
Clerk.
I certify that this Act originated in the House of Representatives.
WM. TYLER PAGE,
Clerk.
IN THE SENATE OF THE UNITED STATES.
May 19, 1924.
The Senate having proceeded to reconsider the bill (H. R. 7959)
entitled "An Act to provide adjusted compensation for the veterans
of the World War, and for other purposes," returned by the President of the United States to the House of Representatives, in which
it originated, with his objections, and passed by the House on a reconsideration of the same, it was
RESOLVED, That the bill pass, two-thirds of the Senators present having voted in the affirmative.
Attest:
GEORGE A. SANDERSON
Secretary.
[ P U B L I C — N o . 4 7 2 — 6 9 T H CONGRESS]
[H. R. 10277]
An Act To amend the World War Adjusted Compensation Act.
Be it enacted by the Senate and House of Representatives OJ the
United States of America in Congress assembled, That section 302
of the World War Adjusted Compensation Act is amended, to take
effect as of May 19, 1924, to read as follows:
" SEC. 302. (a) A veteran may receive the benefits to which he
is entitled by application claiming the benefits of this Act, filed
with the Secretary of War, if he is serving in. or his last service
was with, the military forces; or filed with the Secretary of the
Navy, if he is serving in, or his last service was with, the naval
forces.
u
(b) Such application shall be made and filed on or before January 1, 1928, (1) personally by the veteran, or (2) in case physical or
mental incapacity prevents the making or filing of a personal application, then by such representative of the veteran and in such manner as may be by regulations prescribed. An application made by
a person other than the representative authorized by any such regulation, or not filed on or before January 1, 1928, shall be held void.
If the veteran dies after the application is made and before it is
filed it may be filed by any person: Provided, however. That if the
veteran died between May 19, 1924, and July 1, 1924, without
making the application, leaving a widow surviving him, the application may be made by the widow and shall be valid with the same
force and effect in every respect as if the application had been made
bj the veteran.
"(c) If the veteran dies after the application is made, it shall
be valid if the Secretary of War or the Secretary of the Navy, as
the case may be, finds that it bears the bona fide signature of the
applicant, discloses an intention to claim the benefits of this Act on
behalf of the veteran, and is filed on or before January 1, 1928,
whether or not the veteran is alive at the time it is filed. If the
veteran dies and payments are made to his dependents under Title
VI, and thereafter *a valid application is filed under this section,
then if the adjusted service credit of the veteran is more than $50,
payment shall be made in accordance with Title V, less any amounts
already paid under Title VI.
"(d) The Secretary of War and the Secretary of the Navy shall
jointly make any regulations necessary to the efficient administration of the provisions of this section."
SEC. 2. Section 303 of such Act is amended to read as follows:
" SEC. 303 (a) As soon as practicable after the receipt of a valid
application the Secretary of War or the Secretary of the Navy, as
the case may be, shall transmit to the Director of the United States
Veterans' Bureau (hereinafter in this Act referred to as the
Director) the application and a certificate setting forth—
"(1) That a valid application has been received;
"(2) That the applicant is a veteran;
"(3) His name and address;
[PUB.
472.]
" (4) The date and place of his birth; and
"(5) "The amount of his adjusted service credit.
"(b) Upon receipt of such certificate the Director shall proceed
to extend to the veteran the benefits provided for in Title IV or V."
SEC. 3. (a) Section 308 of such Act is amended, to take effect as
of May 19, 1924, to read as follows:
" SEC. 308. No sum payable under this Act to a veteran or his
dependents, or to his estate, or to any beneficiary named under Title
V, no adjusted service certificate, and no proceeds of any loan made
on such certificate shall be subject to attachment, levy, or seizure
under any legal or equitable process, or to National or State taxation, and no deductions on account of any indebtedness of the veteran
to the United States shall be made from the adjusted service credit
or from any amounts due under this Act."
(b) As used in this section the term " original credit" means
the amount of the adjusted service credit computed under the World
War Adjusted Compensation Act before its amendment by this Act,
less amounts deducted on account of any indebtedness of the veteran
to the United States; and the term " new credit " means the amount
of the adjusted service credit computed under such Act as amended
by this Act, without such deduction.
(c) If the veteran is alive at the time of the enactment of this
Act and the benefits of the World War Adjusted Compensation Act
have been extended to him, then any excess of the new credit over
the original credit shall be considered as if it were a separate
adjusted service credit and the benefits of such Act shall be extended
in respect thereof according to the terms of such Act as amended
by this Act.
(d) If the veteran has died before the enactment of this Act and
before making application under section 302 of the World War
Adjusted Compensation Act, then if any part of the original credit
has been paid to the dependents of the veteran, any remaining part
shall be paid as provided in Title VI of such Act as amended by
this Act, and any excess of the new credit over the original credit
shall be paid in cash in a lump sum to the dependents as provided
in Title VI of such Act as amended by this Act.
(e) If the veteran has died before the enactment of this Act after
having made application, then—
(1) If the original credit was not over $50 and the new credit is
not over $50 payment shall be made as provided in subdivision (d).
(2) If the original credit was not over $50 and the new credit is
over $50 then the face value of an adjusted service certificate
computed on the basis of the new credit shall be paid to the
beneficiary named, or, if the beneficiary died before the veteran and
no new beneficiary was named or if no beneficiary was named in the
application, then to the estate of the veteran. If in any such case
any payments have already been made to the veteran or his
dependents, the amount of such payments shall be deducted from the
face value of the adjusted service certificate.
(3) If the original credit was over $50 then the face value of an
adjusted service certificate computed on the basis of the excess of
the new credit over the original credit shall be paid as provided in
paragraph (2) of this subdivision.
[PCB. 472.J
6
(f) Wherever under this Act or the World War Adjusted
Compensation Act it is provided that payment shall be made by the
Director of the United States Veterans' Bureau to the estate of any
decedent, such payment, if not over $500, may, under regulations
prescribed by the Director, be made to the persons found by him to
be entitled thereto, without the necessity of compliance with the
requirements of law in respect of the administration of such estate.
SEC. 4. (a) Any person who charges or collects, or attempts to
charge or collect, either directly or indirectly, any fee or other
compensation for assisting in any manner a veteran, his dependents
or other beneficiary under this Act, in obtaining any of the benefits,
privileges or loans to which he is entitled under the provisions of
this Act, shall, upon conviction thereof, be subject to a fine of not
more than $500, or imprisonment for not more than one year, or both.
(b) Such Act is amended by adding after section 309 a new
section to read as follows:
" FINALITY OF DECISIONS
" SEC. 310. The decisions of the Secretary of War, the Secretary
of the Navy, and the Director, on all matters within their respective
jurisdictions under the provisions of this Act (except the duties
vested in them by Title VII) shall be final and conclusive."
SEC. 5. Section 503 of such Act is amended 10 read as follows:
" SEC. 503. No certificate issued or right conferred under the provisions of this title shall, except as provided in section 502, be
negotiable or assignable or serve as security for a loan. Any negotiation, assignment, or loan made in violation of any provision of
this section shall be held void. If any person is named as beneficiary by the veteran as a consideration for the making of a loan
to the veteran by such person or an}' other person, such naming
shall be void. Any person who accepts an assignment of a certificate or receives a certificate as security for a loan contrary to the
provisions of this title, or who makes a loan to a veteran in consideration of the naming by the veteran of such person or any
other person as beneficiary, shall be guilty of a misdemeanor and
shall upon conviction thereof be fined not more than $500 or
imprisoned not more than one year, or both."
SEC. 6. Section 601 of such Act is amended to read as follows:
" SEC. 601. If the veteran has died before making application
under section 302, or, if entitled to receive adjusted service pay, has
died after making application but before he has received payment
under Title IV, then the amount of his adjusted service credit shall
(as soon as practicable after receipt of an application in accordance
with the provisions of section 604, but not before March 1, 1925)
be paid to his dependents, in the following order of preference:
"(1) To the widow;
"(2) If no widow entitled to payment, then to the children, share
and share alike;
"(3) If no widow or children entitled to payment, then to the
mother;
"(4) If no widow, children, or mother, entitled to payment, then
to the father."
4
[PUB. 472J
SEC. 7. Section 602 of such Act is amended to read as follows:
" SEC. 602. (a) No payment under section 601 shall be made to a
widow if she has remarried before making application, or if at the
time of the death of the veteran was living apart from him by
reason of her own willful act; nor unless dependent at the time of
the death of the veteran or at any time thereafter and before January 2, 1928. The widow shall be presumed to have been dependent
at the time of the death of the veteran upon a showing of the
martial cohabitation.
"(b) Payment under section 601 shall be made to a child if (1)
under 18 years of age at the time of the death of the veteran, or
(2) at any time thereafter and before January 2, 1928, incapable of
self-support by reason of mental or physical defect.
"(c) No payment under section 601 shall be made to a mother or
father unless dependent at the time of the death of the veteran or
at an}' time thereafter and before January 2, 1928. If at the time
of the death of the veteran or at any time thereafter and before
January 2, 1928, the mother
is unmarried or over 60 years of age,
or the father is over 60 37ears of age, such mother or father, respectively, shall be presumed to be dependent."
SEC. 8. Section 605 of suoh Act is amended to read as follows:
" S*EC. 605. (a) As soon as practicable after the receipt of a valid
application the Secretary of War or the Secretary of the Navy, as
the case may be, shall transmit to the Director the application and
a certificate setting forth—
"(1) That a valid application has been received;
"(2) The name and address of the applicant;
"(3) That the individual upon whom the applicant bases his
claim to payment was a veteran;
"(4) The name of such veteran and the date and place of his
birth; and
"(5) The amount of the adjusted service credit of the veteran.
"(b) Upon receipt of such certificate the Director shall proceed
to extend to the applicant the benefits provided in this title if the
Director finds that the applicant is the dependent entitled thereto."
SEC. 9. Section 607 of such Act is amended by striking out " and "
at the end of subdivision (b), by striking out the period at the
end of subdivision (c) and inserting a semicolon and the word
" and ", and by adding after subdivision (c) a new subdivision to
read as follows:
"(d) The term ' widow ' includes widower."
SEC. 10. Title VI of such Act is amended by adding at the end
thereof a new section to read as follows:
" SEC. 608. If the veteran died while in the service and before
July 1, 1919, and if an adjusted service credit has been or is, after
this section takes effect, certified to the Director, then the sum of
$60 shall be paid in a lump sum to the dependents of such veteran in
the same manner as is provided in sections 601 and 602 of this Act."
SEC. 11. This Act shall not invalidate any payments made or applications received under the World War Adjusted Compensation Act
before the enactment of this Act. Payments under awards heretofore or hereafter made shall be made to the dependent entitled
thereto regardless of change in status, unless another dependent
[PUB.
472.]
0
establishes to the satisfaction of the Director a priority of preference under such Act as amended by this Act. Upon the establishment of such preference the remaining installments shall be paid
to such dependent, but in no case shall the total payments under
Title VI of such Act (except section 608) exceed the adjusted service
credit of the veteran.
SEC. 12. Title VII of such Act is amended by adding at the end
thereof a new section to read as follows:
" SEC. 704. Whoever falsely makes, forges, counterfeits, or alters,
or causes or procures to be made, forged, counterfeited, or altered, or
willingly aids or assists in falsely making, forging, counterfeiting,
or altering an adjusted service certificate issued under authority ox
this Act, or whoever passes, utters, publishes, or sells, or attempts
to pass, utter, publish, or sell, any such false, forged, counterfeited,
or altered certificate, with intent to defraud the United States or
any person, or whoever has in possession any such falsely made,
forged, counterfeited, or altered certificate, with intent to unlawfully use the same, shall be punished by a fine of not more than
$5,000 and imprisonment not more than fifteen years. The Secretary
of the Treasury is hereby authorized to direct and use the Secret
Service Division of the Treasury Department to detect, arrest, and
deliver into the custody of the United States marshal having jurisdiction any person or persons violating any of the provisions of
this section."
SEC. 13. Title VII of such Act is further amended by adding at
the end thereof a new section to take effect as of May 19, 1924, and
to read as follows:
" SEC. 705. Whenever it appears to the Director, by evidence clear
and satisfactory to him, that any adjusted service certificate has,
without bad faith upon the part of the person entitled to payment
thereon, been lost, destroyed, wholly or in part, or so defaced as to
impair its value to the rightful holder, and such adjusted service
certificate is identified by number and description, the Director shall
under such regulations and with such restrictions as to time and
retention for security or otherwise as he may prescribe, issue a duplicate thereof of like value in all respects to the original certificate and
so marked as to show the original number of the certificate lost,
destroyed, or defaced, and the date thereof. The lawful holder of
such certificate who makes application for a duplicate shall surrender the original, if existing, or so much thereof as may remain
and shall file in the United States Veterans' Bureau a bond in a
penal sum of the face value of such lost, destroyed, or defaced certificate, with two good and sufficient securities, residents of the
, United States, to be approved by the Director, with condition to
indemnify and save harmless the United States from any claim upon
such lost, destroyed, or defaced certificate."
Approved, July 3, 1926.
XL SL, VJLI3BANS« BUREAU
D o c c u b c r -9 A 1 2 2 6 .
I
R E G U L A T I O N
Subject:
N 0.
163,
Loanfl on Adjusted Service Certificates under Section 502
of tho World Bar Adjusted Qoopcnsation Act.
1«
CERTIFICATES. - Adjusted service certificates are dated a;:, of
the first day of the nonth in trhict tho applications were filed, but no.
certificates arc dated prior to January 1, 1925. Loons on tho security
of such certificates :'"AV not be Dado "before the e:rpiration of two years
after the date of the certificate. The fact that a certificate is
stamped "duplicate" does not destroy its value as security for a loan.
2.
TO '7H0M LOAN MAT BE I'AE.3. - Only tho veteran naaed in the
certificate can lawfully obtain a loan on his adjustod service certificate and neither the "beneficiary nor any other person than the veteran
has any rights in this respect. The person to whom the loan is nado
nust be known to the lending bank to be the veteran naned in the certificate securing such note. The conso.it of the beneficiary is not required,
the Act providing that a loan on the security of the certificate nay bo
made '•with or without the consent of the beneficiary thereof*11
3.
BY KEOH LOANS MAT BE l£AD£. - Any national bank or any bank or
trust company incorporated under the Iftsrs of any State, territory, possession or the District of Columbia, hereinafter referred to as any
"bank", is authorized to loan to any Veteran upon his promissory note
secured by his adjusted service certificate, any araount not in excess
of the loan value of tho certificate at the date the loan is ;:ado. Each
certificate contains on its face a table for do tor::, in in.; the loan value
of the certificate. Upon the v.-.r.king of su< I in, the lending bank
shall promptly notify tho Bureau of the n&mo of the V ""ran, the A-:iunbcr
shown ii mediately after the name, the nur.ber of tho certificate, the
ar.ount and date of loan; however, this requirement L.I,, be waived by the
Director.
4.
FORM Oi1 IJOTJS. - The fons of note used in naking loans secured
by adjusted service certificates should substantially follorr Form #5615.
5.
IHT3RBST CHARGSS* - The rato of interest which a bank nay
charge upon such a loan shall not oxootdl by noro than 2$£ per aunun, the
rate charged at the date of the loan for tho discount Of 90-day cor;r..erciai
paper under Section 13 of tho Federal Heservo Act by tho Federal Reserve
Bank of the district in which the lcniin.; bank is located^ Shere a loan
is oade by a bank located in a territory or possession not embraced in
any Federal reserve district, tho rate of interest charged shall not exceed tho legal rate in such territory or possession; provided, however,
that the interest charged on loann riado outsido the continental
\
limits of •:••. : •: . " t$s "by a "branch of a bank vrhose head office is in
."' . ral reserve di3trict will J>$flj^ifrxiedby the discount rate on
90-day BOnmercial paj er in effect at ths Federal Reserve Bank of I
district in which the parent "bank is located* lib charge, other than the
interest charge provided herein, may be made by the lending bank, the
Act providing, under penalty, that such bank shall not charge or collect,
or attempt to charge or collect directly or indirectly, any fee or other
compensation in respect of any loan made upon the security of an adjusted
service certificate except the interest authorized "by law. Any violation
of this provision will make the loan void*
6.
SALE GK DISCOUNT OF NOTE 3Y HOLDING 3A1E. - Any bank holding a
note secured by an adjusted service certificate may sell the note to any
bank authorised to Hake a loan to a veteran arid deliver the certificate
x.0 such bank. In case a note secured by an adjusted service certificate
is sold or transferred, the bank selling, discounting or rediscounting
the note is required by lav; to notify the veteran promptly by mail at
his last known post office address. Ho adjusted service certificate is
negotiable or assignable, or may servo as security for a loan, except as
provided in Section 502 of the tforid war Adjusted Compensation Act, which
is printed on the face of each certificate. Any negotiation, assignment
or loan made in violation of Section 5C2 of the World I7ar Adjusted Compensation Act is void. In case of sale, discount or rediscount by the
bank which made the loan, the note should be accompanied by the affidavit
required by paragraph 8 of these regulations.
7.
PcEDISCQUITTS fflTH FEDETvAL RESERVE BABES. - Upon the indorsement
of any bank, which shall be doomed a waiver of demand, notice and protest
by such bank as to its own indorsement exclusively, and subject to.regulations to be prescribed by the Federal Reserve Board, ryay such note
secured by sn adjusted service, certificate and held "by a bonk is rr^ae
eligible for discount or rediscount "by the Federal reserve bank of the
Federal reserve district in which such bark is located, whether or not
the bank offering the note for discount or rediscount is a member of the
Federal Reserve System and whether or not it acquired the note in the
first instence from the voterar. or acquired it by transfer upon the
indorsement of any other bank; provided that at the tine of discount or
rediscount such note has a maturity not in excess of nine months, exclusive
of days of .^-race, and complies in all other respects v:ith the provisions
of the law, the regulations of the Federal Reserve Board and this regulation,
8.
REDEl&nOH 3Y BOBBAD. (a) If the veteran docs not pay the loan
at its maturity, thg bank holding ths note r.nd certificate may at any time
after the maturity of the loan, but not before the expiration of six months
after the iogn v.-as "ffitef present them to the Director of the Bureau, The
Director may in his discretion accept the certificate and note and vzy
the bank in full satisf ction of its claim, the amount of the unpaid
principal due it, and the unpaid interest at the rate fixed in the note,
op to the date of the check issued to the bank,
(b) It r/ill be the policy of the 3urer.u to redeem all
loans wada in accordance v/ith the lav; ana regulations made pursuant
eta, rhen such ?.oanc r:ro nftde in :,ood faith to the vet;ran to
-3whora the certificate We s issued, except that where the note is held by
a "bank for a period in excess of six months after the date of maturity,
the discretion authorized by law may "be invoked and redemption refused.
(c)
If the veteran dies before the maturity of the loan, the
amount of the unpaid -orincipal and the unpaid interest accrued up to the
date of his death shall be lnanediately due and payable. In such case,
or if the veteran dies on the day the loan matures or within six months
thereafter, the bank holding the note and certificate shall, upon notice
of the death,present them to the Director, who shall pay to the bank,
in full satisfaction of its claim, the amount of the unpaid principal and
unpaid interest, at the rate fixed in the note, accrued up to the date of
the check issued to the bank; except that if, prior to the payment, the
bank is notified of the death by the Director and fails to present the
certificate and note to the Director within fifteen days after the notice,
such interest shall be only up to the fifteenth day after such notice,
(d)
in order to be eligible for redemption by the Bureau, the
note and certificate must be accompanied by an affidavit of a duly
authorized officer (the capacity in which the officer serves must be
shown) of the landing bank showing that the said bank has not charged
or collected, or attempted to charge or collect, directly or indirectly,
any fee or other compensation in respect of the loan, or any other loan
made by the bank under the provisions of Section 502 of the World War
Adjusted Compensation Act, except the rate of interest specified in the
section of the Act cited; that the person who obtained the loan is known
to the lending bank to be the person named in the Adjusted Service Certificate; and that notice required by paragraph (3) of this regulation
was pronrptly given* In case the note was sold or discounted by the
lending bank, there should be. incorporated in the affidavit a statement
that the veteran was notified promptly of the transfer by mail to his
last known address. In case the note was resold or rediscounted by any
other bank, affidavit shall be made by a duly authorised officer of such
bank that proper notice of such resale or rediscount was promptly mailed
to the veteran at his last known address. The proper execution of the
appropriate affidavit on Fon.. f6615 will be considered as a compliance
With the requirements of this sub-paragraph. The affidavit must be executed before a judge of the United States court, United States commissioner,
United States district attorney, United States marshal, collector of
internal revenue, collector of customs, United States postmaster, clerk
of court of record under the seal of the court, an executive officer of
an incorporated bank or trust company, under his official designation and
the seal of the bank or trust company, or a notary public under his seal,
or a diplomatic or consular officer of the United States, under his official
seal.
FRA1TK T. HI1JES,
Director*
FEDERAL RESERVE BOARD
REGULATION M, SERIES OF 1926
REDISCOUNT OF NOTES SECURED BY ADJUSTED SERVICE
CERTIFICATES
SECTION I. STATUTORY PROVISIONS
Under the terms of the World War Adjusted Compensation Act
as amended, loans may lawfully be made to veterans upon their
adjusted service certificates only in accordance with the provisions
of section 502 thereof.
Any national bank, or any bank or trust company incorporated
under the laws of any State, Territory, possession, or the District
of Columbia is authorized, after the expiration of two years after
the date of the certificate, to loan to any veteran upon his promissory
note secured by his adjusted service certificate any amount not in
excess of the loan value of the certificate, which is stated on the
face of the certificate. The law provides that the rate of interest
charged upon the loan by the lending bank shall not exceed by more
than 2 per cent per annum the rate charged at the date of the loan
for the discount of 90-day commercial paper by the Federal reserve
bank of the Federal reserve district in which the lending bank is
located.
Upon the indorsement of any bank, which shall be deemed a
waiver of demand, notice and protest by such bank as to its own
indorsement exclusively, and subject to regulations to be prescribed
by the Federal Reserve Board, any such note secured by an adjusted
service certificate and held by a bank is made eligible for rediscount
with the Federal reserve bank of the Federal reserve district in
which such bank is located, whether or not the bank offering the
note for rediscount is a member of the Federal reserve system and
whether or not it acquired the note in the first instance from the
veteran or acquired it by transfer upon the indorsement of any
other bank; provided that at the time of rediscount such note has a
maturity not in excess of nine months, exclusive of days of grace, and
complies in all other respects with the provisions of the law, the
regulations of the United States Veterans' Bureau, and the regulations of the Federal Reserve Board.
SECTION H . DEFINITIONS
Within the meaning of this regulation—
(a) The term " the act" shall mean the World War Adjusted
Compensation Act as amended;
22769*—26
(1)
(b) The term "director" shall mean the Director of the United
States Veterans' Bureau;
(c) The term "certificate" shall mean an adjusted service certificate issued under the provisions of section 501 of the World War
Adjusted Compensation Act as amended;
(d) The term " veteran" shall mean any person to whom an
adjusted service certificate has been issued by the director under the
provisions of the World War Adjusted Compensation Act as
amended;
(e) The term " bank " shall mean any national bank or any bank
or trust company incorporated under the ]aws of any State, Territory, possession, or the District of Columbia;
(/) The term " note " shall mean a promissory note, negotiable
in form, secured by an adjusted service certificate, and evidencing a
loan made by a bank on the security of such certificate in full compliance with the provisions of the World War Adjusted Compensation Act as amended and the regulations of the United States
Veterans' Bureau.
SECTION III. ELIGIBILITY
In order to be eligible for rediscount at a Federal reserve bank,
any such note must—
(a) Arise out of a loan made by a bank to a veteran in full compliance with the provisions of the act and of any regulation which
the director may prescribe;
(b) Be secured by the certificate issued to the maker, which certificate must accompany the note;
(c) Be held by the offering bank in its own right at the time it is
offered for rediscount;
(d) Be negotiable in form and otherwise in the form approved by
the director;
(e) Have a maturity at the time of rediscount not in excess of nine
months, exclusive of days of grace;
(/) Evidence a loan the amount of which does not exceed the loan
value of the certificate for the year in which such loan was made:
(g) Be payable with interest accruing after the date of the note
at a rate stated in the face of the note, which rate must not exceed
by more than 2 per cent per annum the rate charged at the date of
the loan for the discount of 90-day commercial paper by the Federal
reserve bank of the Federal reserve district in which the lending
bank is located;
(h) Bear the indorsement of the bank offering it for rediscount,
which indorsement shall be deemed a waiver of demand, notice, and
protest by such bank as to its own indorsement exclusively;
(i) Be accompanied by the evidence of eligibility required by this
regulation and such other evidence of eligibility as may be required
by the Federal reserve bank to which it is offered for rediscount; and
(j) Comply in all other respects with the requirements of the law
and of this regulation.
SECTION IV. EVIDENCE OF ELIGIBILITY
(a) General.—The Federal reserve bank to which a note is offered
for rediscount must be satisfied either by reference to the note itself
or otherwise that the loan evidenced by the note or any sale, discount, or rediscount thereof complies in all respects with the provisions of section 502 of the act and that the note is eligible for rediscount by a Federal reserve bank under the terms of the law and the
provisions of this regulation.
(b) Affidavit of lending bank.—Any note offered to a Federal reserve bank for rediscount must be •accompanied by the affidavit
required by section 502 (h) of the act and the regulations of the
director, in form approved by the director, made by an officer of
the bank which made the loan, before a notary public or other officer
designated for the purpose by regulation of the director, stating
that—
(1) Such bank has not charged or collected, or attempted to charge
or collect, directly or indirectly, any fee or other compensation in
respect of any loan, made by such bank to any veteran under section
502 of the act, except the interest authorized by such section;
(2) The person who obtained the loan evidenced by such note is
known to be the veteran named in the certificate securing such
note;
(3) Such bank has notified the director that it has made a loan
to the veteran named in the certificate, as required by the regulations of the director; and
(4) Such bank has notified the veteran by mail at his last known
post-office address of any sale, discount, or rediscount of such note
by such bank, as required by section 502(b) of the act.
(c) Affidavit of other banks.—If such note is offered for rediscount by a bank other than the bank which made the loan
thereon, it must also be accompanied by an affidavit of an officer
of the offering bank and an affidavit of an officer of each other bank
which has sold, discounted, or rediscounted such note, which affidavit
shall be in form approved by the director and shall state that the
bank of which the affiant is an officer has promptly notified the veteran by mail at his last known post-office address of the sale, discount,
or rediscount of such note by such bank, as required by section
502 (b) of the act
SECTION V. APPLICATION FOR REDISCOUNT
Every application for the rediscount of such notes shall be made on
a form approved by the Federal reserve bank to which such note
is offered and shall contain a certificate of the offering bank to the
effect that, to the best of its knowledge and belief, such note arose
out of a loan made in full compliance with the provisions of the act
and the regulations of the director and is eligible for rediscount
under the provisions of section 502 of the act and of this regulation.
SECTION VI. PROPER BANK FOR REDISCOUNT
No such note shall be rediscounted by any Federal reserve bank
for any bank not located in its own Federal reserve district, except
that such notes may be rediscounted by any Federal reserve bank for
any other Federal reserve bank.
SECTION VII. RATE OF REDISCOUNT
The rate of interest charged by any Federal reserve bank on any
such note rediscounted by it shall be the same as that charged by
it for the rediscount of 90-day notes drawn for a commercial purpose, except that when such notes are rediscounted for another
Federal reserve bank the rate shall be that fixed by the Federal
Reserve Board.
SECTION VIII. REDISCOUNTS FOR NONMEMBER BANKS
No Federal reserve bank shall rediscount such notes for any nonmember bank until such bank has furnished to the Federal reserve
bank such information as it may request in order to satisfy itself
as to the condition of such bank and the advisability of making the
rediscount for it.
DECEMBER 9, 1926.
WASHTNGTON : GOVERNMENT PRINTING OFFICE : 1928
UNITED STATES VETERANS BUREAU
F o r m 6615
NOTE AND AFFIDAVITS
$
„
(Place)
(Date)
after date, I promise to pay to the order of
—
(Name of bank or trust company)
.of
(City or town and State)
Dollars
for value received, with interest after date at
per cent until paid. This note is payable at the bank named above.
As collateral security for the prompt payment of this note I have delivered to and do hereby pledge with the holder of this
note my adjusted service certificate No
, dated
, further identified by
No. A
This note may be sold, discounted, or rediscounted and the certificate pledged herewith may be
transferred in accordance with the provisions of the World War Adjusted Compensation Act, as amended. If the principal
and interest of this note are not paid at its maturity any bank holding this note and certificate may, at any time after maturity
of the loan, but not before the expiration of six months after the loan was made, present this note and certificate to the Director
of the United States Veterans Bureau in order to secure payment of this loan, as provided in the World War Adjusted Compensation Act.
(Signature of veteran)
(Please print or
^teran
here)
STATE
( Name of veteran
S Street address or route number,
[ City or town and State
or...
COUNTY OF.
I,
, being dulv sworn, depose and say that I am
(Name of officer)
(Title of office)
of
of-
-
(Bank or trust company)
(City or town and State)
which is a bank incorporated under the laws of
; that the person who obtained the
loan evidenced by the above note is known to be the veteran named in the adjusted service certificate referred to therein; that the
said bank or trust company has not charged or collected or attempted to charge or collect, directly or indirectly, any fee or
other compensation (except interest as authorized by Section 502 of the World War Adjusted Compensation Act as amended)
in respect of any loan made under this section by the bank to a veteran; that the United States Veterans Bureau was promptly
notified of the making of the original loan as required by paragraph 3 of Regulation No. 163 of the United States Veterans
Bureau; that in any negotiation of this note by sale, discount, or rediscount subsequent to the original loan, proper legal notice
was given to the veteran as required by Section 502 (6) of the act, and that this affidavit is made pursuant to authority given
by the Board of Directors.
Subscribed and sworn to before me this
(Signature of officer)
day of
(Notary public, or other officer designated by the United States Veterans Bureau)
(See regulation No. 163, U. S. V. B.)
STATE OF
COUNTY
OF..
I,
, thereunto duly authorized, being sworn, depose and say
(Name of officer)
that I am
of the
(Title of office)
of
—
-
(Name of bank or trust company)
and that the veteran who obtained the loan evidenced by the above note,
(City or town and State)
which was transferred to this bank by
(Name of bank or trust company)
has been notified by the
.__".___
that the 6aid note is being
(Name of bank or trust company)
retransferred to the
for sale, discount, or rediscount.
(Name of bank or trust company)
(Signature of officer)
Subscribed and sworn to before me this
day of
(Notary public, or other officer designated by the United States Veterans Bureau)
(See regulation No. 163, U. S. V. B.)
2—14127 *,„
Authority for Rediscounting Notes Secured by Adjusted Service Certificates
With the Federal Reserve Bank of New York
it is desired that the officers of this bank should from time to time be able
to rediscount on its behalf veterans' notes secured by adjusted service certificates, Now,
therefore, be it
WHEREAS,
RESOLVED :
1st. That the President, Vice-President and Cashier are, and each or either of
them is, hereby authorized to rediscount with the Federal Reserve Bank of New York,
any such notes now or hereafter held by this bank, upon such terms and at such time or
times as to him or them may seem desirable.
2nd. That the foregoing powers shall continue and remain in force until express
notice of their revocation has been duly given to said Federal Reserve Bank of New York.
I
do hereby certify that the fore-
going is a true extract from the minutes of a meeting of the Board of Directors of the
a quorum being present,
held at
the
day of
19 .
In witness whereof, I have hereunto set my hand and affixed the official seal of
the said Bank this
SEAL
day of
19
Cr.805M-12
APPLICATION FOR REDISCOUNT OF VETERANS' NOTES
SECURED BY ADJUSTED SERVICE CERTIFICATES
To be made in Duplicate
To
Dated
THE FEDERAL RESERVE BANK OF NEW YORK,
FEDERAL RESERVE P. O. STATION,
NEW YORK, N. Y.
192
The
Bank of
offers herewith for rediscount
the following veterans' notes secured by adjusted service certificates, duly endorsed by it, aggregating $
We agree that the Federal Reserve Bank of New York may charge the amount of the notes to our account at
their maturity, or if not a member of the Federal Reserve System, we promise to place acceptable funds in the hands
of the Federal Reserve Bank of New York covering the amount of each note, which funds shall be available on the
day each note matures.
Our endorsement shall be deemed a waiver of demand, notice and protest.
mber
rom
Up
Name and Address of Veteran
Do Not Use
This Column
Maturity
Rate of
Interest
Charged
Secured by Adjusted Service Cer.
Amount
Number
Date
Loan Value
This Year
I hereby certify that, to the best of my knowledge and belief, the note or notes offered herewith arose out of a
loan made in full compliance with the provisions of the World War Adjusted Compensation Act and the regulations
of the Director of the United States Veterans' Bureau and is eligible for rediscount with a Federal Reserve Bank
under the provisions of Section 502 of the World War Adjusted Compensation Act and of the regulations of the
Federal Reserve Board.
On this date the total amount of money borrowed by this bank on bills payable, rediscounts or otherwise, is:
At Federal Reserve Bank $
At other Banks
$
i Must be signed by an officer authorized by resolution filed with the Federal Reserve Bank)
XPTK:_
A bank not a member of the Federal Reserve System, which applies for the rediscount of notes secured by adjusted service certificates,
will be required to—
(1) Furnish certified copy of resolution of Board of Directors authorizing rediscount with Federal Reserve Bank
of such notes.
(2) Furnish copy of its most recent published statement and such other information as may be required by this bank to
satisfy itself as to the condition of the applying bank and the advisability of making rediscounts for it.
December 2 0 , 1926.
SUMMARY OF IMPORTANT POINTS REGARDING DISCOUNT AND REDISCOUNT
OF VETERANS* NOTES SECURED E^ ADJUSTED SERVICE CERTIFICATES
C i r c u l a r t o g e t h e r w i t h copy of adjusted Compensation Act, Compensation Act Amendment, R e g u l a t i o n s of t h e V e t e r a n s ' E u r e a u , Federal Reserve "Board's R e g u l a t i o n M, forms of promissory note and a f f i d a v i t s , r e s o l u t i o n , and r e d i s c o u n t
a p p l i c a t i o n t o be forwarded t o ev?ry i n c o r p o r a t e d , member or nonmcraber,
bank in t h i s d i s t r i c t . Federal reserve banks will print only circular
l e t t e r , authorisation to rediscount, and application for rediscount. Additional notes and affidavits for use of lending tanks may be obtained from
Veterans1 Bureau or P'ederal reserve bank, (if not possible to use this
form, banks may print own in substantially same form. )
Loaning Powers. Banks
after date of
to January 1,
on promissory
of loan value
are authorized to loan: not before expiration of two years
certificate; (certificates may be dated from January 1, 1925'
1928 ) only to veteran named in certificate (not beneficiary);
note secured by certificate , and not exceeding t o t a l amount
for current year.
Authorization to Sell or Rediscount. lank holding can sell t o , discount, or r e d i s count with any bank authorized to loan to veterans under Section 502, and
can deliver certificate to such bank , but must notify veteran of such
transfer. Certificates not otherwise negotiable or assignable.
Interest Rate. Not to exceed by more than 2% Federal roserve bank rate for 90-day
commercial paper; no other compensation or fee permitted; rate must be
stated in face of note. Lending banks should not deduct interest in advance.
Affidavits.
Lending bank should notify Veterans' Bureau promptly giving name of
veteran, the A number, number of c e r t i f i c a t e , amount and date of loan,
lank discounting must make affidavit by authorized officer before a notary
or other officer designated by Director regarding non-collection of fee,
that he personally knows veteran, and has notified veteran of rediscount or
transfer. Transferee bank if rediscounting must make affidavit that notice
of resale was promptly made to veteran. First affidavit on note i s for
use of lending bank in transferring, or for collection at maturity (in
event of non-payment ) from Director. Second affidavit i s for use of bank
to which note was transferred by lending bank when transferee bank retransf ers.
Notes not Paid at Maturity.
Present to Director not before six months after date
of loan in order to receive principal and interest to date of check, p r o vided bank does not hold note for period exceeding six months after maturi t y . Veteran may redeem certificate by paying Director amount of unpaid
principal and interest paid bank plus six per cent interest compounded
annually on such amount from date of payment to bank to date of such r e *
demption.
Veteran's death, - loan due immediately;
days, no interest thereafter.
should be presented to Director within 15
Rediscount with Federal Reserve Bank - rediscount only (not advance); application,
note and affidavit on specified forms* by member or nonmember; whether
or not acquired in f i r s t instance from veteran or by transfer from any
not over nine months maturity. Federal reserve bank rate
other bank;
http://fraser.stlouisfed.org/same as for 90-xiay commercial paper.
Federal Reserve Bank of St. Louis
E l i g i b i l i t y -Must comply with section 502; loan to veteran only; secured by
adjusted service certificate issued to maker of note; to be held by
offering bank in own right; to be negotiable in form; not over nine
months maturity; loan not to exceed loan value for current year; i n t e r est not over 2% of Federal reserve bank rate on 90-day commercial paper
and rate to be stated in face of note; endorsement of offering bank;
show evidence of e l i g i b i l i t y as to regulationo of Federal Reserve Foard,
etc.;
accompanied by required affidavits and otherwise comply with law
and regulations of Federal Re servo Foard.
I n c l i c i b i l i t y - Fifteen day advance on bank's own promissory note not authorized;
section 13 authorizing fifteen day advances requires notes to be secured
by paper eligible for rediscount under provisions of Federal Reserve Act,
section 502 authorizing rediscount veterans notes not made part of Federal
Reserve Act.
Terms of Rediscount -Certified resolution of Toard of Directors authorizing r e d i s count to be on file with Federal reserve bank; nonmember unable to
rediscount until i t has furnished satisfactory information regarding i t s
condition; proceeds of rediscount by check to nonmember or, upon request,
by credit to member bank in t h i s d i s t r i c t for account of nonmember.
Collection of Notes by Federal Reserve Fank - Member bank: Forward notes to d i s counting bank in advance of maturity with understanding to be charcred to
reserve account at maturity without due notice.
Nonmember: Notice of maturity to be sent approximately ten days in advance, discounting bank to provide Federal reserve bank with available
funds at maturity.
Form for Demand Payment - Printed on back of c e r t i f i c a t e s , should not bo filled
out by borrower or bank. This i s for use of beneficiary only in case of
death of veteran.
Security fo^ Circulation - Federal Reserve Foard has ruled tha^ veterans notes
will not be eligible to secure circulation of Federal reserve notes.
Officers Desipnated to Witness Affidavits - The affidavit must be executed before
a Judge of the United States Court, United States Commissioner, United
States District Attorney, United States Marshal, Collector of Internal
Revenue, Collector of Customs, United States Postmaster, Clerk of Court
of Record under the seal of the Court, an executive of an incorporated
bank or trust company under his official designation and the seal of the
bank or trust company, or a notary public under his seal, or consular
officer of the United States under his official seal,
MISCELLANEOUS DATA
C e r t i f i c a t e s may be dated from January 1 , 1925 t o January 1 ,
1928, and w i l l mature twenty y e a r s t h e r e a f t e r .
I t i s estimated 1,000,000
certificates will be eligible as security for loans January 1, 1927 and
2,500,000 by Juno 30, 1927.
Total number of applications made to December 1, 1926, understood to approximate 2,800,000; t o t a l number eligible estimated at
3,500,000, with estimated t o t a l paid-up value of $3,000,000,000; Treasury
to appropriate each calendar year beginning 1925 and ending 1946, funds
to provide payments in full at face value in twenty years or on prior
death of veteran, appropriation for 1925 to be not in excess of
5100,000,000Total maximum loan value for 1927, approximately
0252,000,000; maximum 1927 loan value to i n d i v i d u a l , ' f o r home service
estimate $105.50, for overseas service estimate 0131.85.
On b a s i s of a c e r t a i n c e r t i f i c a t e havin.r a maturity value of
0494 covering home service from May 10, 1918 to January 31, 1919, i n c l u s i v e , t o t a l i n g 267 days ( l e s s 60 days cash bonus) at $1 per day t o t a l
c r e d i t would be 02O7, therefore i f .A207 plus 25f= (or C>52 ) equalinf $259
would purchase a maturity value of 0494, the t o t a l maximum home credit
of 0500 plus 25$ equaling 0625 would purchase approximately '"'1,200
maturity value, and the t o t a l maximum overseas credit of 0625 plus 25%
equalinf 0781.25 would purchase a maturity value of approximately C'1,500,
The law provides computation of service c r e d i t to be for each day (in
excess of 60 days against cash bonus payment ) in force betv/een April 5,
1917 and July 1, 1919, on the b a s i s of'Ol per day for home service with
t o t a l maximum c r e d i t of 0500 and/or $1.25 per day for overseas service
with t o t a l maximum credit of 0625.
Resolutions are not sent to member banks as"resolution already
filed with Federal reserve bank by them i s sufficients
Under the ruling
of the Attorney General of each s t a t e the superintendent of these s t a t e
banking departments have notified us t h a t savings banks under t h e i r
j u r i s d i c t i o n may or may not make loans to veterans in t h i s respect as
ir.dicatod below:
New York State
New Jersey
No
"Yes
Connecticut
No
TAILS OF LOAN VALU^S ON THIS CERTIFICATE
YEARS
LOAN
IASIS
PEP, 01.00
YEARS
LOAN
TASIS
PER Ol.OO
LOAN
TASIS
qR 51.00
YEARS
LOAN
TASIS
-1.00
LOAN
TASIS
Y^ARS ?^R -3,00
2
.08790
5
.18855
8
.30397
11
.43656
14
.5893'
3
.11994
6
.22528
9
.34613
12
.48507
15
.64536
4
.15347
7
.26372
10
.39028
13
.53595
16
.70425
17
.76617
18
.8 3133
19
.90000
@FedFRASER