Chapter 252. Proposing an amendment to section nineteen of the Federal reserve Act relating to reserves, and for other purposes
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CHAP. 252.— An Act Proposing an amendment to section nineteen of the Federal reserve Act relating to reserves, and for other purposes. August 15, 1914.[[S. 4966](/us/bill/63/s/4966).][[Public, No. 171](/us/pl/63/171).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, That section nineteen, subsectionsFederal Reserve Act.*Ante*, p. 270, amended.Reserves required for deposits.
(b)and
(c)of the Act approved December twenty-third, nineteen hundred and thirteen, known as the Federal reserve Act, be amended and reenacted so as to read as follows: " “(b) A bank in a reserve city, as now or hereafter defined, shall holdIn reserve cities. and maintain reserves equal to fifteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: “In its vaults for a period of thirty-six months after said date, six-fifteenths thereof, and permanently thereafter five-fifteenths. “In the Federal reserve bank of its district for a period of twelve months after the date aforesaid, at least three-fifteenths, and for each succeeding six months an additional one-fifteenth, until six-fifteenths have been so deposited, which shall be the amount permanently required. “ For a period of thirty-six months after said date the balance of the reserves may be held in its own vaults, or in the Federal reserve bank, or in national banks in central reserve cities, as now defined by law. Limited to central reserve cities. “After said thirty-six months’ period all of said reserves, except those hereinbefore required to be held permanently in the vaults of the member bank and in the Federal reserve bank, shall be held in its vaults or in the Federal reserve bank or in both, at the option of the member bank. “(c) A bank in a central reserve city, as now or hereafter defined,In central reserve cities. shall hold and maintain a reserve equal to eighteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: “In its vaults, six-eighteenths thereof. “In the Federal reserve bank, seven-eighteenths. “The balance of said reserves shall be held in its own vaults or in the Federal reserve bank, at its option. “Any Federal reserve hank may receive from the member banks asAcceptance of eligible paper as part of reserve. reserves not exceeding one-half of each installment, eligible paper as described in section thirteen properly indorsed and acceptable to theReference corrected. said reserve bank. “If a State bank or trust company is required or permitted by theReserves by State banks or trust companies. 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 sectionDeposits in national banks added. as if they were reserve deposits in a national bank in a reserve or central reserve city 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, no member bank shallRestriction on deposits, etc , by member banks. 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 reserveUse of reserves. 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 meeting692*Proviso*.Restriction. 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. Basis of reserves.“In estimating the reserves 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 shall be determined. Balances in reserve banks due to member banks shall, to the extent herein provided, be counted as reserves. “Alaskan and insular banks.National banks located in Alaska or outside the continental United States may remain nonmember banks, and shall in that event maintain reserves and comply with all the conditions now providedBanks in Philippine Islands excepted. by law regulating them; or said banks, except in the Philippine Islands, may, with the consent of the 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.” " Approved, August 15, 1914.