FEDERAL RESERVE BOARD WASHINGTON

December "hi, 1921. X - 3 2 9 O

SUBJECT: Se t t l ement through Gold Set t lement Fund of Shipments of "o the r " Federa l Reserve n o t e s .

Dear S i r :

The p l a n r e f e r r e d t o i n t h e B o a r d ' s l e t t e r of December 22, 1921, (X-3279) f o r e f f e c t i n g d a i l y s e t t l e m e n t s f o r shipments of " o t h e r " Federa l Reserve n o t e s w i l l be put i n t o o p e r a t i o n on February 1, 1922, and i s a s f o l l o w s :

Each Federa l Reserve Bank and Branch Federa l Reserve Bank w i l l forward each a f t e r n o o n t o t h e Federa l Reserve Board, beg inn ing February 1, 1922, a t e legram, as p e r form a t t ached h e r e t o , marked E x h i b i t "A", g iv ing t h e amount of f i t Federal Reserve n o t e s shipped t o each o ther Federa l Reserve Bank and t h e amount of u n f i t n o t e s of o ther Federa l Reserve Banks shipped t o t h e Treasu re r of t h e United S t a t e s on the da te of t he t e l e g r a p h i c adv ice . When a Bank or Branch has made no shipment on a g iven d a t e i t ghould wi re t he Board a s f o l l o w s : "No shipment Federa l Reserve n o t e s today" , u s ing t h e code word CIDER. Telegrams should be d i s p a t c h e d i n t ime t o r each t h e Board not l a t e r t h a n 4 o ' c l o c k , Washington t ime.

A f t e r r e c e i p t of t h e Federa l Reserve no te t e l e g r a m s t h e Board w i l l p r e p a r e a t e legram, (copy of form a t t a c h e d — Exh ib i t "D"), t o each Federa l Reserve Bank, g i v i n g t h e amount of t he Bank ' s n o t e s shipped by each o t h e r Federa l Reserve Bank and Branch on t h a t d a t e . These t e legrams w i l l be forwarded t o reach t h e Banks b e f o r e , i f p o s s i b l e , or not l a t e r t h a n t h e u sua l time of r e c e i p t by the Banks of t h e r e g u l a r Gold S e t t l e -ment Fund Clea r ing t e l eg rams .

To reduce the number of words sen t over t he l e a s e d w i r e s a l l s h i p -ments of Federa l Reserve n o t e s should be i n even thousands . The use of numerals should be employed i n a l l t e l eg rams ; t e l e g r a p h o p e r a t o r s should e x e r c i s e e x t r a o r d i n a r y ca re i n t r a n s m i t t i n g messages. I t w i l l be necessary t h a t a t e l e g r a p h o p e r a t o r remain on duty a t each Bank u n t i l both t h e Gold Se t t l ement Fund Clea r ing te legram and t h e Federa l Reserve no te t e l egram or t e l eg rams d i spa tched by the Bank and i t s Branches have been r ece ived by t h e Board, v e r i f i e d and r e l e a s e i n s t r u c t i o n s given from Washington.

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— 2 — X-32Q0

The fo l l owing e n t r i e s may be made by the Federal Reserve Banks on t h e i r books:

For no tes shipped by them, they w i l l DEBIT: Gold Sett lement Fund CREDIT: Federal Reserve n o t e s o ther Federa l Reserve Banks

For no tes of t h e i r i s sue which have been shipped by o ther Federal Reserve Banks and Branches , they w i l l , on r e c e i p t of

•Board 's te legram DEBIT: Federal Reserve n o t e s i n t r a n s i t CREDIT: Gold Set t lement Fund

Upon r e c e i p t of f i t no tes , t h e fo l lowing e n t r i e s w i l l be made: DEBIT: Cash CREDIT: Federal Reserve no tes i n t r a n s i t

F ina l e n t r i e s i n the Federal Reserve no te s i n t r a n s i t account f o r u n f i t n o t e s shipped by o ther Federal Reserve Banks and Branches w i l l be made upon r e c e i p t of advice from the Comptroller of the Currency t h a t the n o t e s have been rece ived and canceled .

For shipments made by Branches, the fo l lowing e n t r i e s w i l l be made by the Head O f f i c e :

DEBIT: Gold Sett lement Fund CREDIT: Branch

When a Branch makes shipments of Federal Reserve no tes , t h e Branch w i l l make the fo l lowing e n t r i e s :

DEBIT: Head Of f i ce CREDIT: Federal Reserve n o t e s o ther Federal Reserve Banks

There a re enclosed herewi th copies of suggested forms t o g e t h e r wi th a memorandum explana tory t h e r e o f . Addi t ional cop ies of t h i s l e t t e r and enc losures a r e fowarded herewi th for t r a n s m i s s i o n by . you to your Branch Branches, i f any.

Very t r u l y yours ,

G o v e r n o r .

Enclosures . GOVERNORS OF ALL FEDERAL RESERVE BANKS.

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x-3290 -a

FORMS TO BE USED

The f o l l o w i n g forms may be used i n connec t i on wi th t h e new p l a n of s e t t l e m e n t :

Exh ib i t 'A' Se t t l ement f o r Federa l Reserve n o t e s

t e legram.

This i s a t r i p l i c a t e form t o be used by the s h i p p i n g Federa l Reserve Bank or Branch f o r f i t Federa l Reserve n o t e s shipped t o o the r Federa l Reserve Banks, and u n f i t Federa l Reserve n o t e s of o t h e r Federa l Reserve Banks shipped t o Washington. The amount of f i t n o t e s t o be en te red i n column under code word CHURCH, and t h e amount of u n f i t n o t e s t o be shown i n column under code word CHURNING, t h e t o t a l s of both columns t o be ex-tended i n grand t o t a l b lock . A l l amounts shown on t h e s e t e l eg rams should be i n even thousands , t h a t i s , o m i t t i n g 000-00. To avdd e r r o r s i n t r a n s -miss ion i n i n s t a n c e s where a sending Bank has no shipments of n o t e s f o r one or more o the r Federa l Reserve Banks, t h e word "NONE" should be i n s e r t e d i n tthe p rope r column.

Copy No. 1 of t h i s form i s t o be forwarded t o t h e Telegraph Depa r t -ment f o r t r a n s m i s s i o n to the Board.

Copy No. 2 i s a c o n f i r m a t i o n of t h i s t e l e g r a m t o be mai led t o t h e Board.

Copy No. 3 s e rves a s the t i c k e t of e n t r y i n t he Federa l Reserve Bank o r Branch.

When t h i s form i s p r i n t e d f o r t h e use of Branch Banks, Copy No. 3 should read "Debit - Head O f f i c e " i n s t e a d of "Debit - Gold Se t t l ement Fund".

If t h e sh ipp ing Bank d e s i r e s one or more o f f i c e cop ie s f o r i n t e r n a l check purposes , t hey may be added wi thou t changing t h e s t anda rd of t h e form.

E x h i b i t 'B' Shipments of Federa l Reserve n o t e s f i t f o r

c i r c u l a t i o n .

This form i s t o be executed by t h e sh ipp ing Federa l Reserve Bank or Branch and enclosed w i t h shipment of f i t Federal Reserve n o t e s and s e rves as the t i c k e t of en t ry i n t h e r e c e i v i n g Federa l Reserve Bank.

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X-3290 a

In accordance wi th the adopted r e p o r t of the Committee on Standard-i z a t i o n of I n t e r - F e d e r a l Reserve Bank Forms, the c o l o r of t h i s t i c k e t should be B u f f .

If the sh ipp ing Federa l Reserve Bank d e s i r e s one or more copies of t h i s form f o r i n t e r n a l check purposes , they may be added wi thout changing the s t anda rd of the form.

Inasmuch as the Federa l Reserve Bank of i s s u e w i l l be advised by t e l e g r a p h through the Federa l Reserve Board of each shipment i n t r a n s i t and the amount r e f l e c t e d i n t h e i r Federal Reserve n o t e s i n t r a n s i t account , no s e p a r a t e advice by mai l has been p rov ided .

.As the sh ipp ing bank immediately ob ta ins payment through the Gold Se t t l ement TUnd and t h e burden of checking to see t h a t t he shipment i s rece ived f a l l s upon t h e bank of i s s u e , no form of acknowledgment or r e -c e i p t f o r the shipment has been p rov ided .

Exh ib i t *C' U n f i t Federa l Reserve no te s shipped to

Washington.

This form i s t o be executed by the sh ipp ing Bank or Branch and serves as an advice to the Bank of i s s u e of the amount and denominations of t h e i r no tes forwarded to the Treasurer of the United S t a t e s f o r redemption*

If the sh ipp ing Federa l Reserve Bank or Branch d e s i r e s one o r more copies of t h i s form f o r i n t e r n a l check purposes , they may be added wi thout changing the s tandard of the form.

Exh ib i t 'D'

Se t t l ement f o r Federa l Reserve no tes te legram.

This i s a d u p l i c a t e form t o be used by the Federa l Reserve Board in t r a n s m i t t i n g Federa l Reserve no te s s e t t l e m e n t te legram to Federa l Reserve Banks.

Se t t l emen t te legrams w i l l i n d i c a t e the amount of f i t n o t e s shipped by o the r Federa l Reserve Banks and t h e i r Branches, i n column under code word CHURCH; u n f i t n o t e s i n column under code word CHURNING and the t o t a l of b o t h columns.

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X-3290 a

Code Words to be Used.

DRUID (See Exhibit A - Form 1.) Please credit our Gold Settlement Fund account for Federal Reserve notes of other Federal Reserve Banks shipped to the "banks of issue and the Treasurer of the United States, Wash-ington, D. C., as follows:

CHURCH (See Exhibit A - Form 1 and Exhibit D - Form 1.) Fit Federal Reserve notes.

CHURNING (See Exhibit A - Form 1 and Exhibit D - Form 1.) Unfit Federal Reserve notes.

DRUMMER (See Exhibit D - Form 1.) In accordance with your telegram of today we have credited your Gold Settlement Hind account for Federal Reserve notes of other Federal Reserve Banks shipped by you (and by your Branches) to the banks of issue and to the Treasurer of the United States, Washington, D. C., as follows:

DUCKBILL (See Exhibit D - Form 1.) Your Gold Settlement Rind account has been charged for Federal Reserve notes of your Bank shipped to you and to the Treasurer of the United States, Washington, D. C., by other Federal Reserve Banks and their Branches as f oilows:

CIDER No shipment Federal Reserve notes today.

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