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1821 EX-OIPFICIO M E M B E R S W . P . 6 . H A R D I N G , GOVERNOR P A U L M. W A R B U R G , VICE GOVERNOR F R E D E R I C A. DELANO ADOLPH C. MILLER C H A R L E S S . HAMLIN W I L L I A M G . MCADOO -SECRETARY OF THE TREASURY CHAIRMAN J O H N SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD 952 WASHINGTON H . P A R K E R W I L L I S , SECRETARY S H E R M A N P . A L L E N . ASST. SECRETARY AND FISCAL AGENT ADDRESS REPLY TO FEDERAL January 4, 1917. Dear S i r : I am s e n d i n g you h e r e w i t h f o u r c o p i e s of d r a f t s of t h e v a r i o u s amendments w h i c h h a v e b e e n p r e p a r e d by t h e Board and s u b m i t t e d a f t e r d i s c u s s i o n t o t h e Committees on B a n k i n g and C u r r e n c y of t h e S e n a t e and t h e House of R e p r e s e n t a t i v e s . You w i l l s e e t h e amendments c o v e r t h e f o l l o w i n g s u b j e c t s : 1. AMENDMENT TO SECTION 16 w h i c h p r o v i d e s (a) f o r t h e i s s u e of F e d e r a l r e serve notes d i r e c t l y against t h e d e p o s i t of 100% g o l d ; o r 1 0 0 $ of p a p e r , o r b o t h . (b) f o r t h e c o u n t i n g of g o l d h e l d by t h e F e d e r a l r e s e r v e a g e n t s as s e c u r i t y f o r n o t e s , as p a r t of t h e g o l d r e s e r v e r e q u i r e d t o be h e l d by t h e b a n k a g a i n s t such Federal reserve n o t e s . T h i s amendment was a p p r o v e d and e n d o r s e d by a m a j o r i t y of t h e B o a r d . 2. and which AMENDMENT simplifying relate t the to OF SECTION clauses reserve 19 in abbreviating Section requirements. 19 This RESERVE BOARD ±822 952. - 2 - p r o p o s e d amendment p r o v i d e s t h a t a l l member banks s h a l l m a i n t a i n r e s e r v e s i n t h e F e d e r a l R e s e r v e Bank as f o l l o w s : (a) (b) (c) A g a i n s t Demand Deposits Count r%r Banks 7$ R e s e r v e C i t y Banks 10$ C e n t r a l R e s e r v e C i t y Banks 13$ A g a i n s t Time Pep os i t s 3$ 3$ 3$ and i n a d d i t i o n e v e r y member bank i s r e q u i r e d t o keep i n i t s own v a u l t f o r t i l l money an amount of s p e c i e o r c u r r e n c y ( n o t n e c e s s a r i l y gold o r l a w f u l money) e q u a l t o f i v e p e r c e n t of i t s demand d e p o s i t s , l e s s t h e amount of n e t b a l a n c e s w i t h F e d e r a l R e s e r v e Banks i n e x c e s s of t h e minimum above s t i p u l a t e d . 3. AMENDMENT OF SECTION 11 s o as t o p e n n i t t h e F e d e r a l R e s e r v e Board t o v a i s e r e s e r v e r e q u i r e m e n t s i n e m e r g e n c i e s , j u s t a s i t i s now empowered i n c e r t a i n c o n t i n g e n c i e s of a d i f f e r e n t k i n d t o l o w e r t h o s e requirements, 4. AMENDMENT OF SECTION 16 t o p e r m i t nonmenber S t a t e banks and t r u s t companies, e v e n though t o o s m a l l t o be e l i g i b l e f o r membership i n t h e F e d e r a l R e s e r v e Banks, t o a v a i l t h e m s e l v e s of t h e c l e a r i n g and c o l l e c t i o n f a c i l i t i e s of t h e F e d e r a l Reserve Banks, p r o v i d e d t h a t t h e y c o v e r a t p a r checks on t h e m s e l v e s s e n t f o r c o l l e c t i o n by t h e F e d e r a l R e s e r v e Bank, and p r o v i d e d f u r t h e r t h a t t h e y keep a c o m p e n s a t i n g b a l a n c i w i t h t h e F e d e r a l R e s e r v e Bank i n an amount t o be d e t e r m i n e d u n d e r r u l e s p r e s c r i b e d by t h e F e d e r a l R e s e r v e B o a r d . 5. AMENDMENT OF SECTION 22 - t h e p e n a l s t a t u t e - s o as t o d e f i n ® more c l e a r l y t h e r i g h t s and l i m i t a t i o n s of d i r e c t o r s i n t h e m a t t e r of 952 -3a c c e p t i n g f e e s or compensation other t h a n t h e ordinary f e e s paid d i r e c t o r s f o r l e g i t i m a t e s e r v i c e s rendered i n the r e g u l a r course of b u s i n e s s , t h e p e r f o r m a n c e of which s e r v i c e s i s n o t incumbent upon them i n t h e i r c a p a c i t y a s d i r e c t o r s . 6. AMENDMENT OF SECTION 1 ] t o r e s t o r e t h e p r o v i s i o n which was by e r r o r s t r i c k e n from t h e Act i n t h e amendments of September 7 , 1916, t h u s r e s t o r i n g t o n a t i o n a l b a n k s , w i t h t h e a p p r o v a l of t h e F e d e r a l R e s e r v e B o ar d , t h e r i g h t t o a c c e p t up t o 100$ of t h e i r c a p i t a l and s u r p l u s i n t r a n s a c t i o n s i n v o l v i n g i m p o r t s o r e x p o r t s . 7. AMENDMENT OF SECTION 17 t o c a n c e l t h e p r o v i s i o n of t h e N a t i o n a l Bank Act which r e q u i r e s n a t i o n a l banks t o m a i n t a i n a minimum d e p o s i t of Government bonds w i t h t h e T r e a s u r e r of t h e United S t a t e s . 8. AMENDMENT OF SECTION 25 t o a u t h o r i z e member banks l o - c a t e d i n c i t i e s of more t h a n 100,000 p o p u l a t i o n and w h i c h have a c a p i t a l and s u r p l u s of more t h a n $ 1 , 0 0 0 , 0 0 0 , t o e s t a b l i s h b r a n c h e s i n t h e same c i t y , p r o v i d e d t h e S t a t e laws do n o t p r o h i b i t S t a t e banks and t r u s t companies from e s t a b l i s h i n g b r a n c h e s . 9» AMENDMENT OF SECTION 9 t o a u t h o r i z e m u t u a l s a v i n g s banks n o t h a v i n g c a p i t a l s t o c k t o become a s s o c i a t e members of t h e F e d e r a l r e s e r v e system under c e r t a i n p r e s c r i b e d c o n d i t i o n s . 10. AMDNEMENT OF SECTION 18 so a s t o g i v e t o U n i t e d S t a t e s one y e a r 3% g o l d n o t e s i n t h e h a n d s of F e d e r a l r e s e r v e b a n k s t h e 1824 952 -Hi- c i r c u l a t i o n p r i v i l e g e f o r t h e i s s u a n c e of F e d e r a l r e s e r v e bank notes. 11. AMENDMENT OF SECTION 4 t o a b o l i s h t h e t i t l e and o f f i c e of Deputy F e d e r a l Reserve A g e n t , t h u s h a v i n g two u n a t t a c h e d C l a s s C d i r e c t o r s i n s t e a d of one as a t p r e s e n t , and t o c r e a t e t h e p o s i t i o n of A s s i s t a n t F e d e r a l Reserve A g e n t , who s h a l l n o t be a d i r e c t o r of t h e b a n k , b u t who s h a l l be a s a l a r i e d bonded o f f i c e r i n t h e F e d e r a l Reserve A g e n t ' s D e p a r t m e n t , s e r v i n g a t a l l t i m e s a s a n A s s i s t a n t t o t h e F e d e r a l Reserve Agent and q u a l i f i e d t o a c t f o r t h e Agent i n h i s a b s e n c e . Very t r u l y y o u r s , Governor. Inc l o s u r e .
@FedFRASER