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~> FEDERAL RESERVE BANK OF NEW YORK No. 848, May 25, 1928T [Circular Reference to Circular No. 828J Method of Determining Net Demand Deposits Subject to Reserve To each Member Bank in the Second Federal Reserve District: The Federal Reserve Board has recently ruled upon the question as to whether deposits in member banks by mutual savings banks, Morris Plan banks, credit unions, building and loan associations and cooperative banks may be considered as deposits " d u e to banks" within the meaning of Section 19 of the Federal Reserve Act, from the total of which amounts " d u e from banks" may be deducted. The substance of the ruling is that deposits made by the following may be classified as "due to banks", Mutual Savings Banks Morris Plan Banks Credit Unions while deposits of building and loan associations and cooperative banks of the type found in Massachusetts may not be so classified. With respect to cooperative banks, the following which is quoted from the ruling is of interest: "Cooperative banks of the type found in Massachusetts are similar in purpose and functions to building and loan associations and are to be classified in the same way. Cooperative banks of the Massachusetts type are to be distinguished from those so-called cooperative banks organized either under national or State law having general banking powers; the latter are undoubtedly banks within the meaning of Section 19." Very truly yours, GATES W. MCGABRAH, Federal Reserve Agent.