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Every member bank shall maintain in its own vaults an amount of specie or currency equal to at least four per centum of its demand deposits less the amount of those reserves with the Federal reserve bank which are in excess of the minimum reserves required by this section.
"Any Federal reserve bank may receive from the member banks as reserves not exceeding one-half of each installment, eligible paper as described in section thirteen properly indorsed and acceptable to the said-reserve-bank.
"If-a-State-bank-or-trust-company is required or permitted by the law-of-its-State-to keep its reserves either in its own vaults-or-with another-State-bank-or-trust-company-or-with-a-national-bank, such
reserve deposits so kept in such State bank, trust company, or national bank shall be construed within the meaning of this section as-if-they-were-reserve-deposits-in-a-national-bank-in-a-reserve-or central-reserve-eity for a period of three years after the Secretary of the Treasury shall have officially announced the establishment of a Federal reserve bank in the district-in which such State bank or trust company is situate Except as thus provided, noNo member bank shall keep on deposit with any nonmember bank a sum in excess of ten per centum of its own paid-up capital and surplus. No member bank shall act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank under the provisions of this act except by permission of the Federal Reserve Board.
"The reserve carried by a member bank with a Federal reserve bank may, under the regulations and subject to such penalties as may be prescribed by the Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any dividends unless and until the total reserve required by law is fully restored.
"In estimating the reserves and the cash in vault required by this Act, the net balance of amounts due to and from other banks shall be taken as the basis for ascertaining the bank deposits against which reserves with Federal reserve banks and cash in vault shall be determined. Balances in reserve banks due to member banks shall to the extent herein provided-be-counted-as-reserves.
"National banks, or banks organized under local laws, located in Alaska or in a dependency or insular possession or any part of the United States outside the continental United States may remain nonmember banks, and shall in that event maintain reserves and comply with all the conditions now provided by law regulating them; or said banks except in the Philippine Islands may, with the consent of the Federal Reserve Board, become member banks of any one of the reserve districts, and shall, in that event, take stock, maintain reserves, and be subject to all the other provisions of this Act."
This section provides for a readjustment and decrease in the reserves required of the member banks. The object of the amendment is twofold. First, to increase the gold holdings of the Federal Reserve System, and thus strengthen the system against any exigency that may result from the European war, and secondly, to decrease the amount of reserves required of member banks. The amendment would add approximately $200,000,000 of gold to the present hold
ings of the Federal reserve banks. The amendment also proposes to require the member banks to maintain in their own vaults, for till money, an amount equal at least to 4 per cent of its demand deposits.
SECTION 8. PERMITTING DIRECTORS, OFFICERS, OR EMPLOYEES OF MEMBER BANKS TO RECEIVE INTEREST ON DEPOSITS AND TO OBTAIN ACCOMMODATIONS UNDER CERTAIN RESTRICTIONS.
SEC. 8. That that part of section twenty-two which reads as follows: "Other than the usual salary or director's fees paid to any officer, director, or employee of a member bank and other than a reasonable fee paid by said bank to such officer, director, or employee for services rendered to such bank, no officer, director, employee, or attorney of a member bank shall be a beneficiary of or receive, directly or indirectly, any fee, commission, gift, or other consideration for or in connection with any transcation or business of the bank," be, and hereby is, amended and reenacted so as to read as follows:
"Other than the usual salary or director's fees fee paid to any officer, director, or employee, or attorney of a member bank, and other than a reasonable fee paid by said bank to such officer, director, or employee, or attorney for services rendered to such bank, no officer, director, employee, or attorney of a member bank shall be a beneficiary of or receive, directly or indirectly, any fee, commission, gift, or other consideration for or in connection with any transaction or business of the bank: Provided, however, That nothing in this Act contained shall be construed to prohibit a director, officer, or employee from receiving the same rate of interest paid to other depositors for similar deposits made with such bank: And provided further, That notes, drafts, bills of exchange, or other evidences of debt executed or indorsed by directors of a member bank may be discounted with such member bank on the same terms and conditions as other notes, drafts, bills of exchange, or evidences of debt upon the affirmative vote or written assent of at least three-fourths of the members of the board of directors of such member
This amendment removes an evident hardship imposed upon directors, officers, and employees of member banks, who, under existing law are precluded from drawing interest on their deposits and prevented from obtaining accommodations in their own bank. The amendment very properly provides for restrictions upon such loans which, in the judgment of the Federal Reserve Board and of your committee, properly insures the bank against fraud and incident loss.
64TH CONGRESS, 2d Session.
REPORT No. 1060.
REFUND OF DUTIES COLLECTED ON TRAVELING
FEBRUARY 14 (calendar day, February 16), 1917.-Ordered to be printed.
Mr. LODGE, from the Committee on Finance, submitted the following
[To accompany S. 7927.]
The Committee on Finance, to whom was referred the bill (S. 7927) providing for the refund of duties collected on five traveling kitchens presented by citizens of Massachusetts to the. Eighth Regiment Massachusetts Volunteer Militia and the First Regiment Field Artillery, Massachusetts Volunteer Militia, having considered the same, report the bill back with sundry amendments and as amended recommend that the bill do pass.
Your committee favors this measure provided that the authorization contained therein is made general, as recommended in the letter of the Secretary of the Treasury, which is appended hereto and made a part of this report.
The CHAIRMAN Committee oN FINANCE,
United States Senate.
SIR: I have the honor to acknowledge the receipt of a communication from your committee, transmitting Senate bill 7927, with a request for such suggestions as I may deem proper touching the merits of the bill and the propriety of its passage. The bill provides for the refund of duties collected on five traveling kitchens, presented by citizens of Massachusetts to the Eighth Regiment, Massachusetts Volunteer Militia, and the First Regiment Field Artillery, Massachusetts Volunteer Militia.
At the time of the importation of these rolling kitchens applications were made to this department for entry free of duty. These applications were necessarily denied, for the reason that under our tariff laws all articles imported from foreign countries are dutiable unless expressly exempted from the payment of duty, and there was and is no provision of law exempting field kitchens from duty.
The department is of the opinion that the bill is a meritorious one, and should be passed amended in the manner hereinafter set forth.
Importations were made of similar kitchens presented to other regiments of the National Guard and to the War Department, and if a refund is authorized in the special cases named in the present bill it would seem only fair that refunds should be made in all cases.
It is suggested therefore that the authorization be general, and that the bill be worded as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby, authorized and directed to refund out of any moneys in the Treasury not otherwise appropriated, to the parties in interest, the duties paid during the calendar year nineteen hundred and sixteen on field kitchens imported by the War Department or furnished to that department or regiments of the National Guard as gifts from citi. zens of the United States."