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FEDERAL RESERVE B O A R D
X-7535
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE B O A R D
August 5, 1933.
SUBJECT: Pro-posed Regulation Regarding
Payment of Interest on Deposits
"by Member Banks.
Dear Mr.
There are inclosed herewith six copies of a proposed
regulation governing the payment of interest on deposits "by member banks, pursuant to the provisions of section 19 of the Federal
Reserve Act, as amended by the Banking Act of 1933.
This proposed
regulation has been tentatively approved by the Federal Reserve
Board.
It will be observed that the proposed regulation prescribes a single maximum rate of interest of three per cent per
annum on all tine and savings deposits.
Careful consideration
has been given to suggestions that maximum rates of interest, varying according to the maturity of the deposits, the locations of
the banks or other factors, be prescribed; but so many factors
enter into the determination of rates which may be paid by member
banks in different sections of the country on different classes
of time or savings deposits that it appears to be impracticable,
at this time to undertake to solve all of these varying problems
1{
1-7535
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2
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in a satisfactory manner.
Numerous inquiries with respect to the payment of interest
on deposits have "been received and the Board is desirous of issuing
a regulation on the subject at the earliest practicable date.
It
will be appreciated, therefore, if you and the officers of your Federal reserve bank will consider this proposed regulation and give the
Federal Heserve Board your comments and suggestions thereon not later
than Monday, August 14, 1933.
Very truly yours,
Chester Morrill,
Secretary.
Inclosures.
TO CHAIRMAN OF ALL FEDERAL RESERVE BANKS.
@FedFRASER