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GOVERNMENT DEPOSITS

SEC. 15. The moneys held in the general fund of the Treas., except the 5% fund for the redemption of outstanding Nat.-bank notes and the funds provided in this Act for the redemption of Fed. Res. notes may, upon the direction of the Secy. of the Treas., be deposited in Fed. Res. banks, which banks, when required by the Secy. of the Treas., shall act as fiscal agents of the U. S.; and the revenues of the Govt. or any part thereof may be deposited in such banks, and disbursements may be made by checks drawn against such deposits.

No public funds of the Philippine Ids., or of the postal Sav., or any Govt. funds, shall be deposited in the continental U. S. in any bank not belonging to the system established by this Act: Provided, however, That nothing in this Act shall be construed to deny the right of the Secy. of the Treas. to use member banks as depositories.

NOTE ISSUES

SEC. 16. Fed. Res. notes, to be issued at the discretion of the Fed. Res. Board for the purpose of making advances to Fed. Res. banks through the Fed. Res. agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the U. S. and shall be receivable by all Nat. and member banks and Fed. Res. banks and for all taxes, customs, and other public dues. They shall be redeemed in gold on demand at the Treas. Dept. of the U. S., in the city of Washington, D. C., or in gold or lawful money at any Fed. Res. bank.

Any Fed. Res. bank may make application to the local Fed. Res. agent for such amount of the Fed. Res. notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Fed. Res. agent of collateral in amount equal to the sum of the Fed. Res. notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under the provisions of Sec. 13 of this Act, or bills of exchange indorsed by a member bank of any Fed. Res. Dist. and purchased under the provisions of Sec. 14 of this Act, or bankers' acceptances purchased under the provisions of said Sec. 14, or gold or gold C't'fs.; but in no event shall such collateral security, whether gold, gold C't'fs., or eligible paper, be less than the amount of Fed. Res. notes applied for. The Fed. Res. agent shall each day notify the Fed. Res. Board of all issues and withdrawals of Fed. Res. notes to and by the Fed. Res. bank to which he is accredited. The said Fed. Res. Board may at any time call upon a Fed. Res. bank for additional security to protect the Fed. Res. notes issued to it.

Every Fed. Res. bank shall maintain reserves in gold or lawful money of not less than 35% against its deposits and reserves in gold of not less than 40% against its Fed. Res. notes in actual circulation: Provided, however, That when the Fed. Res. agent holds gold or gold C't'fs. as collateral for Fed. Res. notes issued to the bank such gold or gold C't'fs. shall be counted as part of the gold reserve which such bank is required to maintain against its Fed. Res. notes in actual circulation. Notes so paid out shall bear upon their faces a distinctive letter and serial number, which shall be assigned by the Fed. Res. Board to each Fed. Res. bank. Whenever Fed. Res. notes issued through one Fed. Res. bank shall be received by another Fed. Res. bank they shall be promptly returned for credit or redemption to the Fed. Res. bank through which they were originally issued or, upon direction of such Fed. Res. bank, they shall be forwarded direct to the Treas. of the U. S. to be retired. No Fed. Res. bank shall pay out notes issued through another under penalty of a tax of 10% upon the face value of notes so paid out. Notes presented for redemption at the Treas. of the U. S. shall be paid out of the redemption fund and

returned to the Fed. Res. banks through which they were originally issued, and thereupon such Fed. Res. bank shall, upon demand of the Secy. of the Treas., reimburse such redemption fund in lawful money or, if such Fed. Res. notes have been redeemed by the Treas. in gold or gold C't'fs., then such funds shall be reimbursed to the extent deemed necessary by the Secy. of the Treas. in gold or gold C't'fs., and such Fed. Res. bank shall, so long as any of its Fed. Res. notes remain outstanding, maintain with the Treas. in gold an amount sufficient in the judgment of the Secy. to provide for all redemptions to be made by the Treas. Fed. Res. notes received by the Treas., otherwise than for redemption, may be exchanged for gold out of the redemption fund hereinafter provided and returned to the reserve bank through which they were originally issued, or they may be returned to such bank for the credit of the U. Š. Fed. Res. notes unfit for circulation shall be returned by the Fed. Res. agents to the Comptroller of the Currency for cancellation and destruction.

The Fed. Res. Board shall require each Fed. Res. bank to maintain on deposit in the Treas. of the U. S. a sum in gold sufficient in the judgment of the Secy. of the Treas. for the redemption of the Fed. Res. notes issued to such bank, but in no event less than 5% of the total amount of notes issued less the amount of gold or gold C't'fs. held by the Fed. Res. agent as collateral security; but such deposit of gold shall be counted and included as part of the 40% reserve hereinbefore required. The board shall have the right, acting through the Fed. Res. agent, to grant in whole or in part or to reject entirely the application of any Fed. Res. bank for Fed. Res. notes; but to the extent that such application may be granted the Fed. Res. Board shall, through its local Fed. Res. agent, supply Fed. Res. notes to the bank so applying, and such bank shall be charged with the amount of such notes issued to it and shall pay such rate of Int. as may be established by the Fed. Res. Board on only that amount of such notes which equals the total amount of its outstanding Fed. Res. notes less the amount of gold or gold C't'fs. held by the Fed. Res. agent as collateral security. Fed. Res. notes issued to any such bank shall, upon delivery, together with such notes of such Fed. Res. bank as may be issued under Sec. 18 of this Act upon security of U. S. 2% Govt. bonds, become a first and paramount lien on all the assets of such bank.

Any Fed. Res. bank may at any time reduce its liability for outstanding Fed. Res. notes by depositing, with the Fed. Res. agent, its Fed. Res. notes, gold, gold C't'fs., or lawful money of the U. S. Fed. Res. notes so deposited shall not be reissued, except upon compliance with the conditions of an original issue.

The Fed. Res. agent shall hold such gold, gold C't'fs., or lawful money available exclusively for exchange for the outstanding Fed. Res. notes when offered by the reserve bank of which he is a director. Upon the request of the Secy. of the Treas. the Fed. Res. Board shall require the Fed. Res. agent to transmit to the Treas. of the U. S. so much of the gold held by him as collateral security for Fed. Res. notes as may be required for the exclusive purpose of the redemption of such Fed. Res. notes, but such gold when deposited with the Treas. shall be counted and considered as if collateral security on deposit with the Fed. Res. agent.

Any Fed. Res. bank may at its discretion withdraw collateral deposited with the local Fed. Res. agent for the protection of its Fed. Res. notes issued to it and shall at the same time substitute therefor other like collateral of equal amount with the approval of the Fed. Res. agent under regulations to be prescribed by the Fed. Res. Board. Any Fed. Res. bank may retire any of its Fed. Res. notes by depositing them with the Fed. Res. agent or with the Treas. of the U. S., and such Fed. Res. bank shall thereupon be entitled to receive back the collateral deposited with the Fed. Res. agent for the security of such notes. Fed. Res. banks shall

not be required to maintain the reserve or the redemption fund heretofore provided for against Fed. Res. notes which have been retired. Fed. Res. notes so deposited shall not be reissued except upon compliance with the conditions of an original issue.

All Fed. Res. notes and all gold, gold C't'fs., and lawful money issued to or deposited with any Fed. Res. agent under the provisions of the Fed. Res. Act shall hereafter be held for such agent, under such rules and regulations as the Fed. Res. Board may prescribe, in the joint custody of himself and the Fed. Res. bank to which he is accredited. Such agent and such Fed. Res. bank shall be jointly liable for the safe-keeping of such Fed. Res. notes, gold, gold C't'fs., and lawful money. Nothing herein contained, however, shall be construed to prohibit a Fed. Res. agent from depositing gold or gold C't'fs. with the Fed. Res. Board, to be held by such board subject to his order, or with the Treas. of the U. S. for the purposes authorized by law.

In order to furnish suitable notes for circulation as Fed. Res. notes, the Comptroller of the Currency shall, under the direction of the Secy. of the Treas., cause plates and dies to be engraved in the best manner to guard against counterfeits and fraudulent alterations, and shall have printed therefrom and numbered such quantities of such notes of the denominations of $5, $10, $20, $50, $100, as may be required to supply the Fed. Res. banks. Such notes shall be in form and tenor as directed by the Secy. of the Treas. under the provisions of this Act and shall bear the distinctive numbers of the several Fed. Res. banks through which they are issued.

When such notes have been prepared, they shall be deposited in the Treas., or in the Subtreas. or mint of the U. S. nearest the place of business of each Fed. Res. bank and shall be held for the use of such bank subject to the order of the Comptroller of the Currency for their delivery, as provided by this Act.

The plates and dies to be procured by the Comptroller of the Currency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executing the laws relating to the procuring of such notes, and all other expenses incidental to their issue and retirement, shall be paid by the Fed. Res. banks, and the Fed. Res. Board shall include in its estimate of expenses levied against the Fed. Res. banks a sufficient amount to cover the expenses herein provided for.

The examination of plates, dies, bed pieces, and so forth, and regulations relating to such examination of plates, dies, and so forth, of Nat.-bank notes provided for in Sec. 5174 Rev. Sts., is hereby extended to include notes herein provided for.

Any appropriation heretofore made out of the general funds of the Treas. for engraving plates and dies, the purchase of distinctive paper, or to cover any other expense in connection with the printing of Nat.-bank notes or notes provided for by the Act of May 30, 1908, and any distinctive paper that may be on hand at the time of the passage of this Act may be used in the discretion of the Secy. for the purposes of this Act, and should the appropriations heretofore made be insufficient to meet the requirements of this Act in addition to circulating notes provided for by existing law, the Secy. is hereby authorized to use so much of any funds in the Treas. not otherwise appropriated for the purpose of furnishing the notes aforesaid: Provided, however, That nothing in this Sec. contained shall be construed as exempting Nat. banks or Fed. Res. banks from their liability to reimburse the U.S. for any expenses incurred in printing and issuing circulating notes. Every Fed. Res. bank shall receive on deposit at par from member banks or from Fed. Res. banks checks and drafts drawn upon any of its depositors, and when remitted by a Fed. Res. bank, checks and drafts drawn by any depositor in any other Fed. Res. bank or member bank upon funds to the credit of said depositor in said reserve bank or member bank. Nothing herein contained shall be construed as prohibiting a member bank from

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charging its actual expense incurred in collecting and remitting funds, or for exchange sold to its patrons. The Fed. Res. Board shall, by rule, fix the charges to be collected by the member banks from its patrons whose checks are cleared through the Fed. Res. bank and the charge which may be imposed for the service of clearing or collection rendered by the Fed. Res. bank.

The Fed. Res. Board shall make and promulgate from time to time regulations governing the transfer of funds and charges therefor among Fed. Res. banks and their branches, and may at its discretion exercise the functions of a clearing house for such Fed. Res. banks, or may designate a Fed. Res. bank to exercise such functions, and may also require each such bank to exercise the functions of a clearing house for its member banks.

That the Secy. of the Treas. is hereby authorized and directed to receive deposits of gold coin or of gold C't'fs. with the Treas. or any Asst. Treas. of the U. S. when tendered by any Fed. Res. bank or Fed. Res. agent for credit to its or his account with the Fed. Res. Board. The Secy. shall prescribe by regulation the form of receipt to be issued by the Treas. or Asst. Treas. to the Fed. Res. bank or Fed. Res. agent making the deposit, and a duplicate of such receipt shall be delivered to the Fed. Res. Board by the Treas. at Wash. upon proper advices from any Asst. Treas. that such deposit has been made. Deposits so made shall be held subject to the orders of the Fed. Res. Board and shall be payable in gold coin or gold C't'fs. on the order of the Fed. Res. Board to any Fed. Res. bank or Fed. Res. agent at the Treasy. or at the Subtreasury of the U. S. nearest the place of business of such Fed. Res. bank or such Fed. Res. agent: Provided, however, That any expense incurred in shipping gold to or from the Treasy. or Subtreasuries in order to make such payments, or as a result of making such payments, shall be paid by the Fed. Res. Board and assessed against the Fed. Res. banks. The order used by the Fed. Res. Board in making such payments shall be signed by the Gov. or Vice Gov., or such other officers or members as the board may by regulation prescribe. The form of such order shall be approved by the Secy. of the Treasy.

The expenses necessarily incurred in carrying out these provisions, including the cost of the C't'fs. or receipts issued for deposits received, and all expenses incident to the handling of such deposits shall be paid by the Fed. Res. Board and included in its assessments against the several Fed. Res. banks.

Gold deposits standing to the credit of any Fed. Res. bank with the Fed. Res. Board shall, at the option of said bank, be counted as part of the lawful reserve which it is required to maintain against outstanding Fed. Res. notes, or as a part of the reserve it is required to maintain against deposits.

Nothing in this Sec. shall be construed as amending Sec. 6 of the Act of March 14, 1900, as amended by the Acts of March 4, 1907, March 2, 1911, and June 12, 1916, nor shall the provisions of this Sec. be construed to apply to the deposits made or to the receipts or C't'fs. issued under those Acts.

SEC. 17. So much of the provisions of Sec. 5159 of the Rev. Sts. of the U. S., and Sec. 4 of the Act of June 20, 1874, and Sec. 8 of the Act of July 12, 1882, and of any other provisions of existing statutes as require that before any Nat. B'k'g. Asso. shall be authorized to commence banking business it shall transfer and deliver to the Treas. of the U. S. a stated amount of U. S. registered bonds, and so much of those provisions or of any other provisions of existing statutes as require any Nat. B'k'g. Asso. now or hereafter organized to maintain a minimum deposit of such bonds with the Treas. is hereby repealed.

REFUNDING BONDS

SEC. 18. After 2 years from the passage of this Act, and at any time during a period of 20 years thereafter, any member bank desiring to retire the whole or any part of its circulating notes, may file with the Treas. of the U. S. an application to sell for its account, at par and accrued Int., U. S. bonds securing circulation to be retired.

The Treas. shall, at the end of each quarterly period, furnish the Fed. Res. Board with a list of such applications, and the Fed. Res. Board may, in its discretion, require the Fed. Res. banks to purchase such bonds from the banks whose applications have been filed with the Treas. at least 10 days before the end of any quarterly period at which the Fed. Res. Board may direct the purchase to be made: Provided, That Fed. Res. banks shall not be permitted to purchase an amount to exceed $25,000,000 of such bonds in any one year, and which amount shall include bonds acquired under Sec. 4 of this Act by the Fed. Res. bank.

Provided further, That the Fed. Res. Board shall allot to each Fed. Res. bank such proportion of such bonds as the capital and surplus of such bank shall bear to the aggregate capital and surplus of all the Fed. Res. banks.

Upon notice from the Treas. of the amount of bonds so sold for its account, each member bank shall duly assign and transfer, in writing, such bonds to the Fed. Res. bank purchasing the same, and such Fed. Res. bank shall, thereupon, deposit lawful money with the Treas. of the U. S. for the purchase price of such bonds, and the Treas. shall pay to the member bank selling such bonds any balance due after deducting a sufficient sum to redeem its outstanding notes secured by such bonds, which notes shall be canceled and permanently retired when redeemed.

The Fed. Res. banks purchasing such bonds shall be permitted to take out an amount of circulating notes equal to the par value of such bonds. Upon the deposit with the Treas. of the U. S. of bonds so purchased, or any bonds with the circulating privilege acquired under Sec. 4 of this Áct, any Fed. Res. bank making such deposit in the manner provided by existing law, shall be entitled to receive from the Comptroller of the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value of the bonds so deposited. Such notes shall be the obligations of the Fed. Res. bank procuring the same, and shall be in form prescribed by the Secy. of the Treas., and to the same tenor and effect as Nat.-bank notes now provided by law. They shall be issued and redeemed under the same terms and conditions as Nat.-bank notes except that they shall not be limited to the amount of the capital stock of the Fed. Res. bank issuing them.

Upon application of any Fed. Res. bank, approved by the Fed. Res. Board, the Secy. of the Treas. may issue, in exchange for U. S. 2% gold bonds bearing the circulation privilege, but against which no circulation is outstanding, one-year gold notes of the U. S. without the circulation privilege, to an amount not to exceed of the 2% bonds so tendered for exchange, and 30-year 3% gold bonds without the circulation privilege for the remainder of the 2% bonds so tendered: Provided, That at the time of such exchange the Fed. Res. bank obtaining such one-year gold notes shall enter into an obligation with the Secy. of the Treas. binding itself to purchase from the U. S. for gold at the maturity of such one-year notes, an amount equal to those delivered in exchange for such bonds, if so requested by the Secy., and at each maturity of one-year notes so purchased by such Fed. Res. bank, to purchase from the U. S. such an amount of one-year notes as the Secy, may tender to such bank, not to exceed the amount issued to such bank in the first instance, in exchange for the 2% U. S. gold bonds; said obligation to purchase at maturity such notes shall continue in force for a period not to exceed 30 years.

For the purpose of making the exchange herein provided for, the Secy.

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