Mr. MORLEY. On our books as well as their books. I believe that was the policy that we-well, we drew down, I believe we drew down, zero.

Mr. MORRISON. On your books?

Mr. MORLEY. On our books. We would not have a negative credit balance on our books, we just basically drew down to zero.

Mr. MORRISON. That was your policy from when in 1982?
Mr. MORLEY. From May until, I believe, October.

Mr. FOMON. 1982?

Mr. MORRISON. Is that right?

Mr. MORLEY. I believe it's 1982.

Mr. MORRISON. Is there writing that supports that policy?
Mr. MORLEY. Yes, sir.

Mr. MORRISON. Can we receive that?

Mr. MORLEY. Yes, sir. [Information follows:]

FC 14 (REV. 9/78)

Attached is an interim authorized drawdown worksheet that should be used by all branches until your banks have signed the standard bank consent form.

This worksheet allows the branches to drawdown daily the immediately available deposits and all checks drawn on banks in the same Federal Reserve district as the local branch bank. The remaining deposits are treated as having two day availability and are not drawn down until the following business day.

Please distribute the worksheet to your branches and instruct them
to use it until the consent form is signed and returned. In addition,
the branches should also forward to you copies of the daily worksheets at
the end of every week.

Pursuant to Paragraph 5 of the Final Judgment of Permanent Injunction entered yesterday, the following wire should be sent to all branches immediately:

"FROM TODAY, AND UNTIL FURTHER NOTICE, ALL USE OF
THE DRAWDOWN SHEET IS TO CEASE. THE AMOUNT OF EACH
DAY'S DRAWDOWN CHECK IS TO BE COMPUTED ONLY, REPEAT
ONLY, AS FOLLOWS:

OPENING GENERAL LEDGER (CHECK BOOK) BALANCE
PLUS TODAY'S DEPOSITS PLUS TODAY'S CREDIT
MEMORANDA FROM BANK LESS TODAY'S LOCAL CHECKS
OR WITHDRAWALS LESS TODAY'S DEBIT MEMORANDA
FROM BANK.

IF THE AMOUNT IS NEGATIVE, DO NOT DRAWDOWN TODAY BUT
INSTEAD DEPOSIT A U.S. TRUST CHECK IN THAT AMOUNT TO
BRING THE GENERAL LEDGER BALANCE TO ZERO."

CALILL GORDON & REINDEL

-2

Ed Krugman of our office has revised this with Tom Morley and has told Morley to call you if he has any questions.

Sincerely,

tom Cum

Thomas F. Curnin

Thomas W. Rae, Esq.

E.F. Hutton & Company Inc.

One Broadway - 3rd Floor
New York, NY 10004

BY HAND

CC: Mr. Thomas Morley