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FEDER L RESERVE BO RD

WASHINGTON

T O

T H E FEDERAL RESERVE BOARD

X-7285

November 4, 1932.

SUBJECT: Shipment of Canceled Checks,

e t c . , b y Expres s.

Dear

S i r :

With further reference

to t he

above subject, which

was the subject of the Board 's let ter of October 15, 1932,

(X-7272), there

a r e

inclosed

f o r

your information copies

of

further correspondence,

a s

follows:

(1 ) Le tt er dated October 21, 1932, from the

Governor

of the

Federal Reserve Bank

of

Cleveland

and a

copy

of the

inclosure

r e -

f e r red

to

therein.

(2 )

Le tt er dated October

21, 1932,

from

the

Governor

of the


of

Dallas.

Very truly yours,

Chester Morrill,

Secretary.

Inclosures.

TO

GOVERNORS

OF ALL F . R .

BAMS.

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C O P Y X-7285~a

FEDERAL RESERVE BAH

OF CLEVEIAHD

October

21, 1932.

M r.

Chester Morrill, Secretary,

Federal Reserve Board,

Washington, D. C.

Dear M r. Morri l l :

I n

response

t o t h e

board's l e t t e r X-7272

of

October

15, 1932,

subject Shipment

of

Canceled Checks,

E t c , , b y

Express ,

we

have

to r e -

port that

i t h a s

been

t h e

pract ice

of

this bank

a n d i t s

branches

f o r

many

years t o ship t o t h e Treasury Department by express Government checks and

warrants accompanied by the daily transcript of the Treasurer 's general ac-

count, a s well a s a limited number of bulky cash letters to our member

banks. The shipment of Treasury checks and warrants by express was begun

a t t h e

suggestion

of the

Federal Reserve Board contained

i n i t s

l e t t e r

of

November

30, 1918

(X-1296),

and the

shipment

of

bulky cash letters

by ex-

press

was

adopted

a s a

measure

of

added protection afforded

by the

special

handling given express shipments, as well as the saving i n transportat ion

charges, which i s quite substantial on large packages. The volume of ex-

press shipments was not augmented a t t h e time t h e increased postal rates

became effective.

Our

experience with

t h e

Post Office inspectors

h a s

been similar

t o

that

of

Kansas City;

i n

July

of

this year,

an

inspector from

t h e

Cleve-

land di s t r i c t to ld u s that this bank was v io la t ing t h e postal laws by send-

i n g cash le t ters to our member banks by express instead of by mail . He

was informed that our in te rp re ta t ion of the law indicated that we were with-

in our r igh ts i n using t h e express company f o r t h e shipment of checks, and

that

t h e

adding-machine l i s t accompanying

t h e

checks

was in the

nature

of

a n

invoice such

a s t h e

Post Of fi ce Department approves

f o r

enclosure with

parcel post shipments.

I n

September

of

this year,

a

Post Office inspector from

t h e

Pi t ts -

burgh dis t r ic t v is i ted our Pittsburgh Branch, calling attention t o a n a l -

leged violation

of the

postal laws

i n

sending cash letters

by

express

and

requested that

t h e

prac t ice

b e

discontin ued. Aft er conf err ing with

our

Pittsburgh Branch and obtaining detailed information regarding t h e number

of express shipments, a l e t t e r was received from t h e inspector estimating

t h e amount of revenue of which th e Post Office Department was deprived d u r -

i n g t h e pe riod from Ju ly 6 to th e time t h e matter was taken up with the

branch,

as no t

less than $734.40.

A

copy

of

th i s l e t t e r

i s

enclosed.

KTo

formal demand

h as

been m&de

by th e

Post Of fi ce Department

f o r

re-imburse-

ment. Our Cincinnati Branch has had no communication from t h e postal a u -

t h o r i t i e s

on

th is su bjec t .

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X-7285-a

FEDEBA.L EESEHVE

BAH

OF CISVELAED

Mr. Chester Morrill, Secretary - a - October 21, 1932.

Federal Eeserve Board,

Washington, D. C.

We

have been advised that

a

report regarding

t h e

prac t i ce

of

this bank

a n d i t s

Pittsburgh Branch

h as

been forwarded

t o t h e

Post Office

Department

i n

Washington.

Very truly yours,

F:S:K

(S) E. E. Fancher

Governor.

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X-7285-b

PITTSBURGH BRAHCH

FEDERAL BE SERVE BAHK OF CLEVELAHD

POST OFFICE DEPARTMENT

OFFICE

OF

INSPECTOR.

1. C. Kennedy-

Inspector

S Pit tsburgh, P a . , September 24, 1932

Mr. F. E.

Cobun

Assistant Cashier

Pittsburgh Branch Federal Reserve Bank

Pittsburgh,

Pa.

Dear

S i r :

At a

conference with

you

yesterday regarding

t h e

transmission

of mail matter through express channels you stated that you sent an

average of 30 l e t t e r s a day weighing 12 ounces or more t o your corres-

pondent banks.

The

postage revenue

on

this would

be not

less than

$10.80.

The

increased postage rates went into effect July

6, 1932.

There were

68

business days between

t h e

time

of the

increase

i n

rates

and the time that I called a t your office and a t th i s ra te t h e Post

Office Department

was

deprived

of

revenue

t o a

minimum charge

of

$734.40,

this based on the assumption that each of the 30 letters mailed daily

by you

weighed

a t

leas t

12

ounces

and the

amount estimated

i s t h e

minimum

amount of revenue lost to the Post Off ice Department through the use of

t h e

Railway Express.

Please advise

i f

this estimate

i s

correct .

I am

enclosing

an

officially addressed envelope requiring no postage f o r your use in

submitting

a

reply.

Very respectfully,

L. C. KE1TNEDY (signed)

Post Office Inspector

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4 6

C O P Y X-7285-c

FEDERAL RESERVE BANK

OF

DALLAS

B. A.

McKinney

Governor

October 21, 1932


Washington,

D. C.

Gentlemen: Attention

of Mr.

Chester Morrill

This will acknowledge receipt

of

your le t t e r X—7272,

dated October

15, 1932,

su bj ec t: Shipment

of

Canceled Checks,

e t c . , b y

Express.

For your information,' we a r e a t this time sending

dai ly t ranscr ip ts

of the

general account

of the

Treasurer

of

t h e United States by express, accompanied by paid vouchers. We

a r e

also forwarding

by

express daily cash letters

t o

twelve

o r

f i f t ee n banking in st i t uti ons within t h e d i s t r i c t , a s well a s

t h e

Federal Reserve Bank Branch

a t

Oklahoma City,

a l l o f

which

are now accompanied by l e t t e r s of transmit ta l .

Early i n September we had an experience here somewhat

similar

t o

that

of the

Kansas City Federal Reserve Bank.

An

inspector

of the

Post Of fi ce Department ca ll ed upon

us a t

that

time

and

inquired

if we

were sending checks

by

express, accom-

panied by a pr in ted le t t e r of tr an sm it ta l. Upon lear ning of our

manner

of

handling such items,

he

obtained copies

o f a l l

t r ans -

mittal letters, which, according to our understanding, were to

b e

refer red

t o t he

Office

of the

Third Assistant Postmaster

Gen-

eral

f o r a

def in i te ru l ing .

We had n o t ,

pr ior

t o t he

receip t

of

your letter, heard anything further i n connection with t h e i n -

vest igat ion .

We a re a t

th is time giving

t h e

matter consideration,

and

without further discussion with

t h e

Post Office Department,

contemplate instituting

a t an

early date

a

plan which will

com-

p l y with t h e suggestion of counsel i n a manner that should p r o -

tect this bank from

any

complaint

on the

part

of the

Post Office

Department.

Very truly yours,

(S) B. A.

McKinney

Governor.

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