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Z-7885 IIITERPRETATION OF BAifKIHG ACT OP 1933 (Copies to be sent to all Federal reserve banks) April 28, 1934. KEHTOlf - SAW FRANCISCO Retel March 29 in regard to authority of member banks to purchase corporate stocks solely upon order and for account of customers • Board concurs in Comptroller* s opinion that term QUOTE investment securities UNQUOTE in paragraph seventh of Section 5136 of Revised Statutes may not be properly interpreted as including corporate stocks, and that said section prohibits national banks from purchasing stocks upon order and for account of customers, and it is view of Board that such restrictions are made applicable to State member banks by Section 9 of Federal Reserve Act. Although restrictions of Section 5136 as to dealing in investment securities do not take effect until June 16, 1934, it is Board's opinion that restrictions as to purchase of stock for own account or for account of others became effective June 16, 1933, the date of approval of Banking Act of 1933. (Signed) Chester Morrill MORRILL
@FedFRASER