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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
Federal Reserve Bank
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
Federal Reserve Bank
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.