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January 30, 1934.

Honorable Eugene R. Black, Governor,
Federal Reserve Board,
Washington, D. C.
Dear Governor Black:
H. R. 6976, known as the "Gold Reserve Act of 1934" has now
passed both Houses and been signed by the President.
At all stages of the discussion of the subject covered by
this legislation we have been constantly in touch with the legal
questions involved and our views both as to the form the transaction
should take and as to the legal questions involved have been reported
from time to time to the Federal Reserve Board and to the Governors
of the Federal reserve


Facing the practical question present-

ed by the passage of the legislation we have been asked to advise
whether voluntary compliance with the requirements of the Act as it
affects the stock of gold owned or controlled by the Federal Reserve
System is safe and wise.
We are of the opinion that the Federal Reserve Board, the
Federal reserve banks and the Federal reserve agents can safely comply with the provisions of this legislation as finally enacted and
that no reservation or protest is necessary to save whatever rights
they have or to fulfill any duty imposed upon them by law, particular-

Honorable Eugene R. Black - - 2

ly in view of the fact that the transactions are between them and
the Government of the United States, which is ultimately responsible
for the monetary policy of the Nation, for the payment of Federal
reserve notes and for the credit and welfare of the Federal Reserve
System established by it as an instrumentality for the performance
of public functions.
We therefore answer both questions submitted to us in the

Respectfully yours,

Walter Wyatt,
General Counsel, Federal Reserve Board.

Newton D. Baker,
Special Counsel for the Federal Reserve
Board and the Federal Reserve System.