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DAVID F . H O U S T O N S E C R E T A R Y O F T H E T R E A S U R Y

C H A I R M A N

J O H N S K E L T O N WILLIAMS C O M P T R O L L E R O F T H E C U R R E N C Y

ADDRESS REPLY TO FEDERAL RESERVE BOARD

FEDERAL RESERVE BOARD

WASHINGTON

W, P . 6 . H A R D I N G , GOVERNOR

A L B E R T S T R A U S S , VICE GOVERNOR A D O L P H C . MILLER

C H A R L E S S . HAMLIN

H E N R Y A. L & E H C T N P A H

W . T . C H A P M A N , SECRETARY R. G . E M E R S O N , ASSISTANT SECRETARY

W . M. IMLAY, FISCAL AOENT

Septeniber 22,1920. X-201}

Dear Sir:

There are. enclosed herewith copies of c o n f i d e n t i a l i n s t r u c t i o n s i ssued by the Sec re ta ry of the Treasury under d a t e of August 30th, 1920, with r e s pe c t to Federal Reserve Banks, making exchanges, replacements and redemptions of United S t a t e s paper cur rency .

The f e d e r a l Reserve Board understands from previous communica-t i ons t h a t sfoiir hank i s in a p o s i t i o n t o take oveir the a d d i t i o n a l f u n c t i o n s iinmediately. Kiiidly advise the Board of the exact d a t e as soon as determined when your bank w i l l commence these riew currency opera t ions i n order t h a t the Treasurer cf the United S t a t e s and Ass i s t an t Treasurers concerned may be n o t i f i e d .

The Secre ta ry of the Treasury has au thor ized the fo l lowing s ta tement by him to be used by Federa l Reserve Banks i n making t h e i r announcements of the assumption of these new opera t ions i n United S t a t e s paper cur rency , t o banking i n s t i t u t i o n s i n t h e i r Federal Reserve D i s t r i c t s toge ther witfr such l o c a l s tatement of r egu la t ions as may be neces sa ry :

" In a n t i c i p a t i o n of the discont inuance of the seve ra l s u b - t r e a s u r i e s p r i o r t o June 30, n e x t , as d i r e c t e d by recen t l e g i s l a t i o n , the Secre ta ry of the Treasury has author ized and i n s t r u c t e d I n d e r a l Reserve Banks, as f a c i l i t i e s a re p r e s e n t , t o undertake exchanges and replacement .of United S t a t e s paper cu r rency . 4nd f u r t h e r , i n order t o f u r n i s h improved f a c i l i t i e s f o r the pub l i c and i n order t o e s t a b l i s h as equ i t ab l e a d i s t r i b u t i o n as p o s s i b l e of United S t a t e s paper currency f i t f o r c i r c u l a t i o n , the Secre ta ry has d i r e c t e d the Treasurer of the United S t a t e s h e r e a f t e r no t to make d i r e c t shipments of currency f i t

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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f o r c i r c u l a t i o n to remi t t ing banks ; but to t ransmit a c r e d i t t o the appropr ia te Federal Reserve Bank, which bank s h a l l make appropriate shipment. I t i s be-l ieved t h i s procedure w i l l r e s u l t i n improving the general s i t u a t i o n through-out the United Sta tes not only with respect t o the condi t ion of the paper currency, but with respect to the sho r t -age of notes of small denominations now e x i s t i n g in many sec t ions of the country*"

Very t r u l y yours,

Governor.

Enclosure.

To Chairmen of a l l P.R. Banks EXCEPT RICHMOND CHICAGO j m DALLAS,

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