HOUSE BILL.

Whenever any Federal reserve bank shall pay out or disburse Fed

eral reserve notes issued to it as herein before provided, it shall segregate in its own vaults and shall carry to a special reserve account on its books gold or lawful money equal in amount to thirty-three and one-third per centum of the reserve notes so paid out by it, such reserve to be used for the redemption of said reserve notes as presented; but any Federal reserve bank so using any part of such reserve to redeem

notes shall immediately carry 31 to said reserve account an

amount of gold or lawful money sufficient to make said reserve equal to thirty-three and onethird per centum of its outstanding

Federal reserve notes.

OWEN AMENDMENT.

Whenever any Federal reserve bank shall pay out or disburse Fed eral reserve notes issued to it as hereinbefore provided, it 50 shall segregate in its own vaults and shall carry to a special reserve account on its books reserve goldgold or lawful money equal in amount to thirty three and one third per centum of the reserve notes so paid out by it, such reserve to be used for the redemption of said reserve notes as presented; but any Federal reserve bank so using any part of such reserve to redeem notes, shall immediately carry to said reserve account an amount of gold or lawful money sufficient to make said reserve equal to thirty three and one third per centum of its outstanding Federal reserve notes.

Every Federal reserve bank shall maintain reserves in gold or lawful money of not less than thirty-five per centum against its deposits and its Federal reserve notes in actual circulation, but the amount of gold in the Federal reserve bank together with the amount deposited by it with the Treasury, shall be at least equal to thirtythree and one-third per centum of the Federal reserve notes issued to said bank and in actual circulation and not offset by gold or lawful money deposited with the Federal reserve agent. The Federal Reserve Board may notify any Federal reserve bank whose lawful reserve shall be below the amount required to be maintained to make good such reserve; and if such bank shall fail for thirty days thereafter so to make good its lawful reserve, the Federal Reserve Board may suspend and take possession of such reserve bank and administer the same during the period of suspension.

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HITCHCOCK AMENDMENT.

Whenever any Federal reserve bank shall pay out or disburse Fed eral reserve notes issued to it as hereinbefore provided, it shall seg regate in its own vaults and shall carry to a special reserve account on its books gold or lawful money equal in amount to thirty three and one third per centum of the reserve notes so paid out by it, such reserve to be used for the redemption of said reserve notes as presented; but any Federal reserve bank so using any part of such reserve to redeem

49

notes shall immediately earry to said reserve account an amount of gold or lawful money sufficient to make said reserve equal to thirty three and one third per centum of its out standing Federal reserve notes.

Whenever any reserve bank shall pay out or disburse Federal reserve notes issued to it as hereinbefore provided, it shall segregate and turn over to its reserve agent gold coin or gold bullion or United States gold certificates to the amount of the face value of the notes so outstanding, or, at its option, shall segregate and turn over to the reserve agent gold coin or gold bullion or United States gold certificates to the amount of forty-five per centum of such face value and in addition thereto collaterals consisting of promissory notes and bills accepted for rediscount under the provisions of this Act, or refunding notes of the United States hereinafter provided for, or both such collaterals and refunding notes equal at their face value to one hundred per centum of the face value of the notes so outstanding. Such collaterals may be exchanged from time to time for other collaterals of like quality and of equal face value or refunding notes within the limitations aforesaid: Provided, That whenever and so long as such reserve shall fall and remain below forty-five per centum the reserve bank shall pay a special tax upon the deficiency of reserve at a rate increasing in proportion to such deficiency, as follows: For each two and one-half per centum or fraction thereof that the reserve falls below forty-five per centum a tax shall be levied at the rate of one per centum per annum: Provided further, That no additional circulating notes shall be issued whenever and so long as the amount of such reserve falls below thirty per centum of its

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paid out shall bear upon their faces a distinctive letter and serial number, which shall be assigned by the Federal Reserve Board to each Federal reserve bank. Whenever Federal reserve notes issued through one Federal reserve bank shall be received by another Federal reserve bank they shall be returned for redemption to the Federal reserve bank through which they were originally issued, or shall be charged off against Government deposits and returned to the Treasury of the United States, or shall be presented to the said Treasury for redemption.

No Federal reserve bank shall pay out notes issued through another under penalty of a tax of ten per centum upon the face value of notes so paid out. Notes presented for redemption at the Treasury of the United States shall be paid and returned to the Federal reserve banks through which they were originally issued, and Federal reserve notes received by the Treasury otherwise than for redemption shall be exchanged for lawful money out of the five per centum redemption fund hereinafter provided and returned as hereinbefore provided to the reserve bank through which they were originally issued.

The Federal Reserve Board shall have power, in its discretion, to re

quire Federal reserve banks 32 to maintain on deposit in the Treasury of the United States a sum in gold equal to five per centum of such amount of Federal reserve notes as may be issued to them under the provisions of this Act; but such five per centum shall be counted and included as part of the thirty-three and one-third per centum reserve hereinbefore required.

S D-63-2--vol 25-6

Notes so paid

out shall bear upon their faces a distinctive letter and serial number, which shall be assigned by the Federal Reserve Board to each Federal reserve bank.

Whenever Federal

reserve notes issued through one Federal reserve bank shall be received by another Federal reserve bank they shall be promptly returned for credit or redemption to the Federal reserve bank through which they were originally issued,-or-shall be charged off against Government deposits and returned to the Treas ury of the United States, or shall be presented to the said Treasury for redemption.

No Federal reserve bank shall pay out notes issued through another under penalty of a tax of ten per centum upon the face value of notes so paid out. Notes presented for redemption at the Treasury of the United States shall be paid out of the redemption fund and returned to the Federal reserve banks through which they were originally issued, and. Federal reserve notes received by the Treasury, otherwise than for redemption, shall may be exchanged for lawful money gold out of the five per eentum redemption fund hereinafter provided and returned as hereinbefore provided to the reserve bank through which they were originally issued, or they may be returned to such bank for the credit of the United Federal reserve notes unfit for circulation shall be returned by the Federal reserve agents to the Comptroller of the Currency for cancellation and destruction.

States.

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The Federal Reserve Board shall have power, in its discretion, to require each Federal reserve banks bank to maintain on deposit in the Treasury of the United States a sum in gold equal to five per centum of sufficient in the judgment of the Secretary of the Treasury for the redemption of such amount of the Federal reserve notes as may be issued to them-under the provisions of this Aet such bank but in no event less than five per centum; but such five per eentum deposit of gold shall be count

HITCHCOCK AMENDMENT.

outstanding notes: Provided, That the amount of such tax paid by the bank during a fiscal year shall be charged to the member banks in its district in proportion to their average discounts during that year.

Notes

so paid out shall bear upon their faces a distinctive letter and serial number, which shall be assigned by the Federal Reserve Board to each Federal reserve bank. Whenever Federal reserve notes issued through one Federal reserve bank shall be received by another Federal reserve bank they shall be returned promptly for redemption to the Federal reserve bank through which they were originally issued, or shall be charged off against Government deposits and returned to the Treas ury of the United States, or shall be presented to the said Treasury for redemption.

No Federal reserve bank shall pay out notes issued through another under penalty of a tax of ten per centum upon the face value of notes so paid out. Notes presented for redemption at the Treasury of the United States shall be paid and returned to the Federal reserve banks through which they were originally issued, and Federal reserve notes received by the Treasury otherwise than for redemption shall be exchanged for lawful money out of the five

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per centum redemption fund hereinafter provided and re turned as hereinbefore pro vided to the reserve bank through which they were originally issued out of the redemption fund and shall not be reissued except upon compliance with the conditions of an original issue.

The Federal Reserve Board shall have power, in its discretion, to require Federal reserve banks to shall maintain on deposit in the Treasury of the United States a sum in gold equal to five per centum of such amount of Federal reserve notes as may be issued to them and outstanding under the provisions of this Act and such additional sums as the Secretary of the Treasury may from time to time decide to be necessary, not exceeding in the aggregate ten per centum, but such five per

HOUSE BILL.

The said board shall also have the right to grant in whole or in part or to reject entirely the application of any Federal reserve bank for Federal reserve notes; but to the extent and in the amount that such application may be granted the Federal Reserve Board shall, through its local Federal reserve. agent, deposit Federal reserve notes with the bank so applying, and such bank shall be charged with the amount of such notes and shall pay such rate of interest on said amount as may be established by the Federal Reserve Board, which rate shall not be less than one-half of one per centum per annum, and the amount of such Federal reserve notes so issued to any such bank shall, upon delivery, become a first and paramount lien on all the assets of such bank.

Any Federal reserve bank may at any time reduce its liability for outstanding Federal reserve notes by the deposit of Federal reserve notes, whether issued to such bank or to some other reserve bank, or lawful

money of the United States, 33 or gold bullion, with any Fed

eral reserve agent or with the Treasurer of the United States, and such reduction shall be accompanied by a corresponding reduction in the required reserve fund of lawful money set apart for the redemption of said notes and by the release of a corresponding amount of the collateral security deposited with the local Federal reserve agent.

OWEN AMENDMENT.

ed and included as part of the thirty-three and one-third per centum reserve herein before required.

The

said board shall also have the right, acting through the Federal reserve agent, to grant in whole or in part or to reject entirely the application of any Federal reserve bank for Federal reserve notes; but to the extent and in the amount that such application may be granted the Federal Reserve Board shall, through its local Federal reserve agent, deposit supply Federal reserve notes with to the banks bank so applying, and such bank shall be charged with the amount of such notes and shall pay such rate of interest on said amount as may be established by the Federal Reserve Board, which rate shall not be less than one half of one per eentum per annum, and the amount of such Federal reserve notes so issued to any such bank shall, upon delivery, become a first and paramount lien on all the assets of such bank.

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Any Federal reserve bank may at any time reduce its liability for outstanding Federal reserve notes by the deposit of depositing, with the Federal reserve agent, its Federal reserve notes, whether issued to such bank or to some other reserve bank, or lawful money of the United States, or gold bullion, with any Federal reserve agent, or with the Treasurer of the United States, and such reduction shall be accompanied by a corresponding reduction in the required reserve fund of lawful money set apart for the redemption of said notes and by the release of a corresponding amount of the col lateral security deposited with the local Federal reserve agent, gold certificates, or lawful money of the United States. Federal reserve notes so deposited shall not be reissued, except upon compliance with the conditions of an original issue.

The Federal reserve agent shall hold such gold, gold certificates, or lawful money available exclusively for exchange for the outstanding Federal reserve notes when offered by the reserve bank of which he is a director. Upon the request of the Secretary of

HITCHCOCK AMENDMENT.

centum deposit of gold which shall be segregated and maintained as a trust fund shall be counted and included as part of the thirty three and one third per centum reserve hereinbefore required against said

notes.

The said board shall also have the right to grant in whole or in part or to reject entirely the application of any Federal reserve bank for Federal reserve notes; but to the extent and in the amount that such-application may be granted the Federal Reserve Board shall, through its local Federal reserve agent, deposit Federal reserve notes with the bank so applying, and such, provided said reserve bank complies with the requirements of this Act as

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to gold reserve and collateral security and otherwise conforms to its provisions. The bank shall be charged with the amount of such notes and shall pay such rate of interest on said amount as may be established by the Fed eral Reserve Board, which rate shall not be less than one half of one per eentum per annum, and the amount of such Federal reserve-notes-se issued to any such bank shall, which, upon delivery, shall become a first and paramount lien on all the assets of such bank.

Any Federal reserve bank may at any time reduce its liability for outstanding Federal reserve notes by the deposit of Federal reserve notes, whether issued to such bank or to some other reserve bank, or lawful money of the United States, or gold bullion, redeeming the same and depositing them with any its Federal reserve agent or with the Treasurer of the United States, and such re duction shall be accompanied by a corresponding reduction in the re quired reserve fund of lawful money set apart for the redemption-of said notes and by the release of a corre spending amount of the collateral security deposited with the local Federal reserve agent, who shall forward them to the Treasury for retirement.