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405

BOARD  O F  GOVERNORS

S - 1 5 ?

O F T H

ADDRlll OFFICIAL CORRKIPONDCNOE

TO THE

 BOARD

Apri l  8 , 1 9 3 9 .

Dear  S i r :

The  Board concurs  i n t h e  a c t i o n  o f t h e  Conference  o f

Presidents held March  6 , 1 9 3 9 , i n  approving  t h e  f o l l o w i n g  r e c -

ommendations  o f t h e  Standing Committee  on  Co l le c t i ons , conta ined

i n i t s  rep ort dated January  1 4 , 1 9 3 0 .  Paragraph numbers r e f e r

t o

  corresponding numbers

  i n t h e

  Committee s re po rt .

3 )  Country it ems payab le  in own  Fe der al Res erv e bank

o r  branch terri tory

That each Federal Reserve bank

  and

  branch give

deferred cred i t  o f n o t t o  exceed  tw o  business days  f o r

a l l  country items payable  i n i t s own  t e r r i t o r y , r e ga r d -

l e s s  o f  whether such Items  a r e  received from  i t s o wn

member banks  o r  from other Federal Reserve banks  and

branches  and  t h e i r di re c t rou ti ng member banks.

4 )  I tems payable ou ts id e  own  Fe der al Res erv e bank  o r

branch terri tory

That each Federal Reserve bank  and  branch give

deferred cred i t

  o f n o t t o

  exceed three business days

f o r a l l  i tems payable outside  o f i t s ow n  terri tory when

received from

  i t s o wn

  member banks.

5) and 6 )   I tems routed d i re ct e i th er  b y  ordinary  o r

a i r  mail

That each Federal Reserve bank

  and

  branch give

deferred cred i t  o f n o t t o  exceed three business days

from date

  o f

  d i spatch

  f o r a l l

  i tems routed d i re ct e i th er

b y  ordinary  o r a i r  mail  t o  other Federal Reserve banks

and  branc hes, pro vide d, however, that  one and  two-day

defe rre d cr ed it from date  o f  d i spatch  b e  g iven  f o r  those

items which  c a n b e  c o l l e c t e d  in one and two  days.

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8 - 1 5 7

7 )

  Member banks

own

  d r a f t s

  on

  their commercial bank

correspondents

That each Federal Reserve bank

  and

  branch give

deferred credit based

  on

  actu al tra ns i t t ime

  for m em -

b e r  banks own  d r a f t s  on  their commercial bank corre-

spondents.

1 0 )  Amend paragraph  c ) o f  Sec t ion  2 o f  Regulat ion  D

That,

  a t an

  appropriate time,

  to be

  determined

b y t h e

  Board

  o f

  Governors, Regulation

  D be

  amended

  t o

agree with Regulation

  J a s i t

  r e l a t e s

  t o

  uncol l ec ted

funds.

1 1 )

  Telegraphic advices regarding dishonored items

That

  n o

  wire cos ts

  b e

  absorbed

  i n

  connection

with telegraphic advices regarding dishonored items

received from

  a

  direct routing bank

  o r

  from

  a

  Federal

Reserve bank

  o r

  branch.

1 2 )  Absorption  o f  shipping charges  on  currency  and  coin

received from nonmember remitting banks

That  n o  s t e p s  b e  taken  a t  this t ime  t o  bring

about uniformity  o f  p r ac t i c e  on the  part  o f  Federal

Reserve banks with regard

  t o t h e

  absorption

  o f

  sh ip-

ping expense

  on

  currency

  and

  coin received from

  n o n -

member remitting banks.

1 3 )

  Cash l e t t e r s prepared

  b y

  nationally known corpora-

t ions

That, while there

  i s n o

  ob j e c t i on

  t o t h e a c -

ceptance

  by

  Fe de ra l Rese rve banks from t h e i r member

banks

  o f

  d e p os i t s

  o f

  checks where

  t h e

  c a s h l e t t e r s

a r e

  prepared

  by

  nationally known corporations

  b u t a c -

tual ly depos i ted

  b y t h e

  member banks,

  no

  arrangements

b e

  made with member banks

  f o r t h e

  acceptance

  o f

  depos-

i t s o f

  checks directly from such corporations them-

s e l v e s

  f o r t h e

  c r e d i t

  o f t h e

  member banks wit ho ut f i r s t

securing opinion

  o f

  couns el that such accept ance

  i s n o t

i n  v i o l a t i o n  o f  l aws re lat ing  t o  branch banking.

2 3 )  Subcommittee  o f t h e  Standing Committee  on  C o l l e c -

t i ons

That  a  Subcommittee  o f t h e  Standing Committee

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- 3 -

407

S-157

on

  C o l l e c t i o n s c o n s i s t i n g

  o f

  three persons,

  w ho a r e n o t

members  o f t h e  Standing Committee  on  C o l l e c t i o n s  and who

ca n

  devote the ir ent ir e time

  t o t h e

  development

  o f t h e

subj ec t  and a  comprehensive report thereon,  b e  appointed

b y t h e

  Conference

  o f

  P r e s i d e n t s

  t o

  make

  a

  study

  o f t h e

check col lec t ion system  i n i t s  e n t i r e t y  t o  determine what

improvements  may be  made.

The  recommendations contained  i n  paragraphs  8) and 9 )

with respect

  t o a n

  amendment

  t o

  Regulat ion

  J and a

  change

  i n t h e

check co l l e c t ion c i rcu lar re la t ing  t o  d i rec t rout ing  a n d t h e r e c -

ommendations contained

  i n t h e

  report

  o f t h e

  Committee

  o f

  Counsel,

paragraphs  1 4 ) t o 2 2 ) , a r e now  under con side rat i on.  You  w i l l

be

  advised with respect

  t o

  these recommendations

  a t a n

  early date.

The  Board understands that  t h e  Standing Committee  on

C o l l e c t i o n s  a n d t h e  Committee  o f  Counsel w i l l meet  i n  Chicago  on

Apr i l  1 9 f o r t h e  purpose  o f  cons ider ing  t h e  proposed regulat ion

on  noncash co l l ec t i o n s , amendments  t o  Regulat ion  J , and  changes

i n t h e  uniform paragraphs  o f t h e  cash  and  noncash co l l e c t ion  c i r -

c u l a r s .

  I n t h e

  c ircumstances ,

  i t i s

  assumed that

  no

  Federal

  R e -

se rv e bank w i l l make  a n y o f t h e  changcs which have been suggested

i n i t s

  cash

  o r

  noncash co l l e c t io n c i rcu lars

  o r i n

  a v a i l a b i l i t y

schedules unti l after these meetings have been held.

I n  forwarding  t h e  revised time schedules between  F e d -

eral Reserve bank  and  branch c i t i e s  t o t h e  Board  f o r  approval ,  i t

w i l l

  b e

  apprec iated

  i f a t t h e

  same time

  y o u

  w i l l send

  u s

  .copies

o f t h e  cash  and  noncash co l l e c t i on c i rcu lar s w i t h  t h e  proposed

changes incorporated therein

  i n

  order that

  t h e

  Board

  may

  have

  an

opportunity  t o  rev iew them be fo re the y  a r e  r e l eased .

Very truly yours,

L . P .  Bethea,

Ass i s t ant Secre t ary .

TO   PRESIDENTS  OF ALL  FEDERAL RESERVE BANKS.

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408

BOARD

  O F

  GOVERNORS

O F T H

S-158

FEDERAL RESERVE SYSTEM

W S H I N G T O N

D D R E S S O F F I CI L C O R R E S P O N D E N C E

T O T H B O R D

April

 13 1939

Dear

 Sir:

For

 your information there

 is en-

closed

 a

 copy

 of a

 letter sent today

 to

Mr.

 Harrison President

 of the

 Federal

 Re-

serve Bank

 of New

 York.

Enclosure

TO

 PRESIDENTS

 OF ALL

 FEDERAL RESERVE BANKS

EXCEPT

 NEW

 YORK

V.ery truly yours

L. P.

 Bethea

Assistant Secretary