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358 S-388 Sec. 5136 R.S .-19 INTERPRETATION OF LAW OR REGULATION (Copies to be Sent to All Federal Reserve Banks) October 25, 1941 ; Mr. Assistant Vice President, Federal Reserve Bank of , Dear Six-: This refers to your letter of September 11, 194-1 raising a question as to the basis to be used in calculating the 10 per cent limitation under the provisions of section 5136 of the Revised Statutes where, as in the case of certain (name of State) banks, a member bank's common stock is shown on the bank's books in an amount less than its par value. As you point out, under the Board's instructions, the par value of the stock, rather than the written-down amount at which it is shown on the bank's books, is used in determining the amount of Federal Reserve Bank stock which the member bank is required to hold in such a case. It is the Board's view that, likewise, the writtendown amount should be disregarded in determining the limitation under section 5136. However, such limitation is based upon the bank's " capital stock actually paid in and unimpaired and * * its unimpaired surplus fund," instead of "paid-up capital stock and surplus" which is the basis for calculating the amounts of Federal Reserve Bank stock. So, for the purposes of section 5136, instead of using par value, the stock should be included only at par value less the impairment thereof, if any. Very truly yours, (Signed) L. P. Bethea L. P. Bethea, Assistant Secretary. #
@FedFRASER