frsbog_mim_v32_0549.pdf

FEDERAL RESERVE BOARD W A S H I N G T O N

a d d r e s s o f f i c i a l c o r r e s p o n d e n c e t o t h e f e d e r a l r e s e r v e b o a r d

X-6610

May 29, 1930.

SUBJECT; Expenses of Federal Reserve Banks in handling matters for Federal Farm Board.

Dear Sir:

, Reference is made to the Board's letter of March 18,

1930 (X-6540) with regard to a recent decision of the

Comptroller General of the United States as to the pay-

ment of expenses incurred in connection with loans made

"by the Federal Farm Board.

For your fur their information in this connection there

are enclosed herewith copies of correspondence "between the

Federal Reserve Board and the Federal Farm Board with re-

gard to this question.

Very truly yours,

E. M. McClelland, Assistant Secretary.

Enclosures.

TO GOVERNORS OF ALL F. B. B#%S.

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C O P Y FEDERAi FARM BOARD

Washington, D. C.

May 21, 1930.

Mr. E. M. McClelland, Asst. Secy., Federal Reserve Board,

Washington, D. C.

Dear Mr. McClelland;

Reference is made to your letter of May 9, the receipt of which was acknowledged under date of May 10, relating to the question of reimbursing the Federal Reserve Banks for ex-penses incurred by them in connection with the work of the Federal Farm Board.

The Board greatly appreciates the desire to cooperate on the part of the Federal Reserve Banks as evidenced "by the copies of letters forwarded by you and desires of course to medt the wishes of the various hanks with respect to the pro-cedure to he followed in making reimbursement to the extent that it is able to do so under the ruling of the Comptroller General on the subject.

At the present time, with but one or two exceptions, the only services being performed by the Federal Reserve Banks for the Federal Farm Board are those of receiving re-mittances forwarded to them and depositing the proceeds of such remittances to the credit of the Revolving Fund of the Federal Farm Board with the Treasurer of the United States. The nature of the services performed by the Federal Reserve Banks in behalf of the Federal Farm Board are not at all analogous to those performed by such banks acting in the capacity of fiscal agents and custodians for the War Finance Corporation, which services embraced the custody and handling for collection of all notes and securities accepted by that corporation in connection with advances made by it. At the present time, with the exception of warehouse receipts and other documents representing commodities against which the Federal Farm Board has made advances which are held by commercial banks as custodians all notes evidencing ad-vances made by the Board and securities pledged in connect-ion therewith are held in Washington, and all matters

I 550 X-6610-a

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C O P Y .-661

Mr. E* M. McClelland. - y2

relating to "billing and the entering of items for collection are likewise handled from here rather than by the Federal Re-serve. Banks.

With the exception of the Federal Reserve Bank of San Francisco, copies of the letters from the several other Fed-eral Reserve Banks which were enclosed in your letter of May 9 do not indicate that the banks involved contemplate making any charge for the services rendered by them at the present time. The Federal Reserve Bank of San Francisco is acting as custodian in connection with one of the loans made by the Board and as pointed out in the letter from that bank satis-factory arrangements have been made for the payment of bills rendered covering services performed by it.

The Board will be glad to guarantee the payment of all legitimate and reasonable charges which may be made by the Fed-eral Reserve Banks to the extent that it may be able to do so under the terms of the ruling of the Comptroller General re-ferred to.

i

Assuring you of our appreciation of your cooperation, I am

Very truly yours,

(Signed) Chris &. Christensen, Secretary.

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C O P Y i 552

X-6610-11

May 9, 1930.

Federal Farm Board, Washington, D. C.

Gentlemen:

When the attention of the Federal Reserve Board was directed to a decision rendered "by the Comptroller General of the United States on February 24, 1930, the apparent effect of which is that Federal reserve banks in handling matters for the Federal Farm Board as fiscal agent of the United States should look to the borrowers from the Federal Farm Board rather than to the Farm Board itself for reimbursement for any expenses incurred, a copy of the Comptroller's decision was sent to each Federal reserve bank for its information. In response to the Board's letter replies have been received from four Federal reserve banks setting forth the views of these banks in the matter and making certain suggestions in regard thereto. A copy of the Board's letter and a copy of the let-ter received from each of the Federal reserve banks on this subject are enclosed herewith.

These letters are submitted to you for your information as to the views of these particular Federal reserve banks with re-spect to the manner in which expenses incurred in handling matters for the Federal Farm Board should be reimbursed. It is hoped that the Federal Farm Board will find it possible, notwithstanding the decision of the Comptroller General, to arrange this matter in a manner which will be satisfactory to the Federal reserve banks with which transactions of this kind are had.

By Order of the Federal Reserve Board.

Very truly yours,

E. M. McClelland, Assistant Secretary.

Enclosures.

GBV sad

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