F E D E R A L R E S E H B E B O A R D

STATEMENT FOR THE PRESS. X-1759

Release Morning Papers , December 18,1919.

The Federal Reserve Board, has authorized and d i r e c t e d the Federa l Reserve

Bank of Sans ELS City t o e s t a b l i s h a branch o f f i c e a t Oklahoma City i n order ,

p a r t i c u l a r l y , to expedite shipments o£ currency t o and from member batiks in the

Sta te of Oklahoma and to provide b e t t e r f a c i l i t i e s f o r i n t r a n s t a t e c l e a r i n g of

checks. As s e t f o r t h i n the Board's prel iminary statement of November 3 the

discount f a c i l i t i e s which have bean accorded by the Federa l Reserve Bank of

Kansas City are regarded as ample.

The Branch w i l l be operated i n accordance with the provis ions of Sect ion 3

of the Federal Reserve Act, under by-laws to be framed by the d i r e c t o r s of the

Federal Reserve Bank of Kansas City and approved by the Federa l Reserve Board.

There w i l l be f i v e d i r e c t o r s , three of whom w i l l be appointed by the Federal

Reserve Bank of Kansas Ci ty and two by the Federal Reserve Board, The Board has

recommended t o the Federa l Reserve Bank of Kansas Ci ty tha t the by-laws ass ign

as t e r r i t o r y f o r the Oklahoma Ci ty Branch t h a t po r t ion of the S t a t e of Oklahoma

which i s not included i n the Eleventh Federa l Reserve D i s t r i c t . An ou t l ine of

the powers and f u n c t i o n s t o be exercised by the branch as recommended by the

Board i s , as f o l l o w s :

The Branch bank w i l l receive depos i t s from member banks bu t w i l l ca r ry

no depos i t accounts . Al l amounts rece ived on depos i t w i l l be t ransmit ted d a i l y ,

by te legraph or otherwise , to the Federa l Reserve Bank of Kansas Ci ty f o r c r e d i t

to the accounts of the depos i t ing banks, and each member bank i n the t e r r i t o r y

assigned t o the Branch, wherever loca ted , may, a t i t s opt ion , make remit tances

of currency and checks d i r e c t t o the Federal Reserve Bank of Kansas C i ty . The Branch w i l l c a r r y no Government d e p o s i t s , bu t w i l l redeem Treasury c e r t i f i c a t e s ?

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pay Government checks , and. w i l l c l o s e out ba lances d a l l y wi th the head o f f i c e *

The Branch w i l l c a r r y no ea rn ing a s s e t s ; app l i ca t i ons fear loans or d i s coun t s from

member banks and o f f e r s f o r s a l e of mai l t r a n s f e r s , bankers 1 acceptances and b i l l s

of exchange e l i g i b l e f o r purchase b y Federa l Reserve Banks w i l l be t r ansmi t t ed t o

the Fede ra l Reserve Bank of Kansas C i ty f o r f i n a l ac t ion* Immediate c r e d i t , however*

may be g iven i n cases where i t becomes necessa ry f o r member banks t o r ed i scoun t i n

order to meet c l e a r i n g house d e b i t balances* unexpected d e f i c i e n c i e s i n r e s e r v e s ,

and any o the r case where quick arrangements are necessa ry , a l l a c t u a l r ed i scoun t ing

o p e r a t i o n s , however, t o be made a t the head o f f i c e , i n t e r e s t be ing charged from

the d a t e the no tes were received by the Branch# In cases where no t e s are secured

by United S t a t e s o b l i g a t i o n s , the Branch may, by a u t h o r i t y of the Federa l Reserve

Bark of Raises C i t y , ho ld the c o l l a t e r a l and forward the n o t e s t o t he pa ren t bank

wi th t r u s t r e c e i p t s showing the amount and na ture of c o l l a t e r a l h e l d . Banks i n

the Branch bank t e r r i t o r y may d e a l d i r e c t l y wi th the pa ren t bank. The p r i n c i p a l

f u n c t i o n s to be exerc i sed by the Branch w i l l be the c l e a r i n g and c o l l e c t i o n of

checks and the of shipments of currency to and f rom menfcer barucs i n i t s

t e r r i t o r y . A p r i v a t e wire w i l l be i n s t a l l e d between Kansas C i ty and Oklahoma Ci ty

in order t h a t the Branch may te legraph d a i l y to the pa ren t bank the amounts of a l l

items rece ived f o r immediate c r e d i t or immediate d e b i t t o members or o ther Fede ra l

Reserve Banks, a l so amounts of currency deposi ted aid the d e t a i l s of o ther t r a n s -

a c t i o n s .

This p l an i s the same as the one which governs the opera t ions

of the branch banks a t C i n c i n n a t i , P i t t s b u r g , Buf fa lo end o ther c i t i e s . The Board

has made a thorough s tudy of the b r i e f s and arguments submit ted by r e p r e s e n t a t i v e s

of Afiahnma c i t y and Tu l s a , and has taken a p o l l of the member banks i n the S t a t e

of Oklahoma ou t s ide of the two c i t i e s applying f o r the b ranch , the r e s u l t of which

shows a decided p r e f e r e n c e f o r Oklahoma C i t y , bo th as t o the number of banas and

as t o banking r e sou rce s involved. I t was proved, however, beyond ques t i on t h a t

banks i n e a s t e r n Oklahoma have l a rge volume of i tems which cannot be c o l l e c t e d Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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through Oklahoma City without involving considerable loss of time, and owing

to rai lroad schedules the same condition applies to some banks in the

western part of the Starts.

Under the plan adopted additional f a c i l i t i e s are given without a f f e c t i n g

the "business of any member bank and without forc ing c o l l e c t i o n s in to a r t i f i c i a l

channels. The Board reserves the r ight to authorize the discontinuance of the

Branch at any time i f i t s operation i s found unsat i s factory*

December 17,1919-

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