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PROVISION AUTHORIZING FEDERAL RESERVE BOARD TO SUSPEND MEMBER BANKS FOR UNDUE USE OF BANK CREDIT. The following is quoted from section 4 of the Federal Reserve Aot (page 8 of present edition) as amended by the Banking Act of 1933i w • • • • The Federal Reserve Board may prescribe regulations further defining within the limitations of this Aot the conditions under whioh discounts, advancements, and the accommodations may be extended to member banks. Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts or other credit accommodations, the Federal reserve bank shall give consideration to such information. The chairman of the Federal reserve bank shall report to the Federal Reser^o Board any such undue use of bank credit by any member bank, together with his recommendation, TShenever, in the judgment of the Federal Reserve Board, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the credit facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time,1*
