Full text of Records of the Federal Reserve System, Record Group 82 : S. 2162, A Bill to Restore to Congress Its Constitutional Power to Issue Money and Regulate the Value Thereof; to Provide for the Orderly Distribution of the Abundance With Which a Beneficent Creator Has Blessed Us; to Establish and Maintain the Purchasing Power of Money at a Fixed and Equitable Level; to Restore the Values of Property to Just and Equitable Levels; to Increase the Prices of Agricultural Products to a Point Where They Will Yield the Cost of Production Plus a Fair Profit to the Farmer; to Provide a Living and Just Annual Wage Which Will Enable Every Citizen Willing to Work and Capable of Working to Maintain and Educate His Family on an Increasing Level or Standard of Living; to Repay Debts With Dollars of Equal Value; to Lift in Part the Burden of Taxation; and for Other Purposes : 74th Congress, 1st Session, Box 141

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74TH CONGRESS
1ST SESSION

S. 2162

IN.THE SENATE OF THE UNITED STATES
MARCH

4 (calendar day,

MARCH

5), 1935

Mr. NYE introduced the following bill; which was read twice and referred
to the Committee on Banking and Currency

A BILL
To restore to Congress its constitutional power to issue money and
regulate the value thereof; to provide for the orderly distribution of the abundance with which a beneficent Creator
has blessed us; to establish and maintain the purchasing
power of money at a fixed and equitable level; to restore the
values of property to just and equitable levels; to increase
the prices of agricultural products to a point where they will
yield the cost of production plus a fair profit to the farmer;
to provide a living and just annual wage which will enable
every citizen willing to work and capable of working to
maintain and educate his family on an increasing level or
standard of living; to repay debts with dollars of equal
value; to lift in part the burden of taxation; and for other
purposes.
Whereas the Constitution of the United States in article 1, section
8, clause 5, provides that Congress shall have the power to

coin money and regulate the value thereof and of foreign
coins; and
Whereas the present practice of issuing book credits by commercial banks, and transferring the title of said credits by
check, provides a supplementary medium of exchange, abrogating the said constitutional provision and establishing a
separate, private, and independent monetary system; and
Whereas the permanent welfare of the people and the protection
of the economic life of the Nation are dependent on the establishment of a monetary system wholly subject to the control of Congress which will promote the interests of agriculture and labor, of industry, trade, commerce, and finance
for the economic well-being of all citizens by the maintenance
of price levels which will avoid excessive expansion or
disastrous contraction and which will protect the national
credit and currency at home and in the world markets:
Now, therefore
1

Be it enacted by the Senate and House of Representa-

tives of the United States of America in Congress assembled,

That there is hereby created a central bank, which shall be

known as the " Bank of the United States of America ",

which may be abbreviated as the Bank of the U. S. A.

SEC. 2. The Bank of the U. S. A., so created, shall be

the sole agency of the Congress of the United States to issue

the money of the United States, to control the value thereof,

and the value of foreign moneys, and it shall be the custodian

of all monetary stocks and of all moneys and the guardian of

the public credit of the United States. It shall be the

3
1

central depository of all reserve funds of all banks, banking

institutions, and banking firms under the jurisdiction of the

United States.

States Government.

the issue of circulating notes by national banks are hereby

repealed.

It shall be the sole fiscal agent of the United
All Acts of Congress providing for

SEC 3. (a) There is hereby created a governing board

of the Bank of the U. S. A. which shall be known as the

Board of Directors of the Bank of the U. S. A., which shall

be the monetary authority and agent of Congress of the

Government of the United States.

of the Bank of the U. S. A. shall be composed of one rep-

resentative from each State, elected by the people thereof

at the same time and by the same method as Representatives

in Congress, for a period of twelve years.

after they shall be assembled in consequence of the first

election, they shall be divided by lot equally into six classes;

the seats of the directors of the first class shall be vacated

at the expiration of the second year; the seats of the second

class at the expiration of the fourth year; the third class at

the expiration of the sixth year; the fourth class at the

expiration of the eighth year; the fifth class at the expira-

tion of the tenth year; the sixth class at the expiration of

the twelfth year; so that one-sixth may be chosen every

second year; and if vacancies happen by resignation or

The Board of Directors

Immediately

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1

otherwise the executive of the State affected may make a

temporary appointment until the next general election to

3 fill the vacancy.

The Board of Directors shall choose from

among their own number an executive board consisting of

seven members and including a governor and a vice governor

selected by a majority of the forty-eight directors.

salary of each director shall be the same as that of an

Associate Justice of the Supreme Court of the United

States and be paid out of the funds of the United States

The

Treasury not otherwise appropriated.

The directors shall

not during their term of office hold any direct or indirect

12 financial interest in any bank, banking institution, banking
13 firm, financial institution, or any firm or corporation as
14

stockholder, director, or officer either in the United States

or in any foreign country.

assemble on the first Monday in December and remain in

session at least nine months during each year.

shall constitute a quorum.

rules for its proceedings; and Congress may, by the process

of impeachment, remove a director.

ing the term for which he is elected, be appointed to any

civil office under the authority of the United States or of

the States or Territories or possessions, nor be a Member

of either house of Congress. Any director shall be eligible

for reelection.

The Board of Directors shall

A majority

The Board may determine the

No director shall, dur-

Upon attaining the age of seventy years,

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each director shall retire, with an annual pension for the

rest of his natural life equal to $1,000 per year for each

year of service or major fraction thereof: Provided, That

the maximum annual pension shall be $.12,000, which shall

be paid out of the funds of the United States Treasury not

otherwise appropriated,

(b) The Secretary of the Treasury and the Oomptrol-

ler of the Currency shall be ex-officio members of the Exec-

utive Board of the Bank of the U. 8. A.

the time of the enactment of this Act shall serve as mem-

bers of the Executive Board of the Bank of the U. S, A,

until their successors are elected and qualify, as herein

specified.

SEC. 4. (a) The Board of Directors of the Bank of

the U. S. A. is authorized to appoint and fix the com-

pensation of a president and vice president and such other

executive officers, examiners, economists, and other experts

as may be necessary to carry out its functions under this

Act, without regard to provisions of other laws applicable

to the employment and compensation of officers and em-

ployees of the United States; and, in addition thereto, the

Board may, subject to the civil-service laws, appoint such

further officers and employees as in their judgment may be

6
1

necessary, and fix their salaries in accordance with the

classification Act of 1923, as amended.

(b) The Board of Directors of the Bank of the U.S. A.

shall have its principal office in Washington; District of

Columbia. It shall establish branch offices in each State

of the United States and in its Territories and possessions

and may establish agencies to conduct a general business

of banking and to provide banking facilities in any recog-

nized trading center of the United States which is denied

adequate banking facilities by private institutions. It shall

formulate policies and regulations for the management of

such branch offices and agencies. Branch offices shall be

designated by States, as Maine branch, Bank of the U. S. A.,

California branch, Bank of the U. S. A., and so forth.

SEC. 5. (a) After the passage of this Act no currency

shall be issued under the authority of the United States, ex-

cept notes of the Bank of the U. S. A. of the same size

as the present Federal Reserve notes and of such denomina-

tions as may be determined by the Executive Board of the

Bank of the U. S. A., which said bank notes shall be full

legal tender at face value for all debts public and private

within the United States or its Territories or possessions.

(b) Within one year from the passage of this Act,

all present Federal Reserve notes, Federal Reserve bank

notes, national bank notes, gold certificates, silver certifi-

7cates,

Treasury notes of 1890, and United States notes is

sued and outstanding, shall be recalled for redemption, and

those turned in for redemption shall be retired and destroyed,

and notes of the Bank of the IT. S. A. herein provided shall

be issued in exchange, it being the purpose of this Act to

substitute the notes of the Bank of the U. S. A. herein pro-

vided for all other forms of paper currency of the United

States.
SEC. 6. In the exercise of its jurisdiction as agent of the

Congress of the United States to issue money and to control

the value thereof, the Executive Board of the Bank of the

U. S. A. may from time to time order and direct the Secre-

13 tary of the Treasury of the United States to engrave or
14

cause to be engraved, and to print or cause to be printed,

United States bank notes as provided in this Act, in such

quantities and denominations as the said Board may deem

necessary, and to hold the said United States bank notes

subject to further order of the said Board.

SEC. 7. The Secretary of the Treasury of the United

States shall, upon receipt of directions or instructions or
orders from the Executive Board, duly authenticated in such

manner as may be prescribed by the Board of Directors, exe-

cute the said directions, instructions, or orders, forthwith,

by engraving, printing, and disposing of the said notes of

the Bank of the U. S. A. as specified in said duly authenti-

8
1

cated directions, instructions, or orders, and the said duly

authenticated directions, instructions, or orders, shall at all

times be considered and construed to be the direct acts of

the Congress of the United States, through its duly author-

ized agent, the Bank of the U. S. A.

SEC. 8. (a) Immediately upon the passage of this

Act, the Bank of the U.S. A. is hereby authorized and

directed as soon as possible to purchase the capital stock

of the twelve FederalReserve banks and branches, and

agencies thereof, and to pay to the owners thereof in the

notes of the Bank of the U. S. A. the paid-in value of said

stock, with 6 per centum per annum interest from the last

dividend date.

(b) That all member banks of the Federal Reserve

System are hereby required and directed to deliver forth-

with to the Bank of the U. S. A. all the stock of the said

Federal Reserve banks owned or controlled by them, to-

gether with any and all claims of any kind or nature in and

to the capital assets of the said Federal Reserve banks, it

being the intention of this Act to vest in the Government

of the United States the absolute and unconditional owner-

ship of the said Federal Reserve banks.

SEC. 9. Upon the purchase of the stock of any Fed-

24 eral Reserve bank by the Bank of the U. S. A. as herein
25

provided, the said Federal Reserve bank shall immediately

9
1

become a branch of the Bank of the U. S. A. and subject

in every respect to the jurisdiction of the Board of Directors

of the Bank of the U. S. A. herein provided for, and the

terms of the officers of the Board of Governors of the said

Federal Reserve bank shall immediately cease and ter-

minate: Provided, however, That the chairman of the Board

of Governors of the said Federal Reserve bank and all the

executive officers or employees thereof shall continue to

perform their customary duties and obligations in the oper-

ation of said Federal Reserve bank until their successors

shall be appointed by the elected Board of Directors of

the Bank of the U S. A.

SEC. 10. (a) All individuals, firms, associations, or

corporations engaged in the business of banking as defined

by law and among other things receiving deposits of money

or credit from the citizens or firms, corporations, or asso-

ciations of any State and transferring or transporting said

money or credit or the title thereto to other banks or indi-

viduals, firms, associations, or corporations of any other

State or States, Territories, and possessions of the United

States, are hereby declared to be engaged in interstate

commerce, and as such are subject to Federal jurisdiction

and to the jurisdiction of the Bank of the U. S. A, and all

the provisions of this Act.

10
1

(b) Within one year after the passage of this Act,

all banking institutions under the jurisdiction of the Bank

of the IT. S. A. shall be required to keep on deposit with

the Bank of the U. S. A., or in its vaults, United States

bank notes herein provided for a full 100 per centum of

its deposits which are subject to check and payable on de-

mand; and, in addition thereto, it shall keep within its

vaults the further sum equal to 5 per centum upon all sav-

ings or investment deposits commonly known as " time "

deposits.

reserve hereinabove required, the Bank of the U. S. A. shall

purchase from banks in the United States bonds of the

United States Government.

SEC. 11. The Bank of the U. S. A. is hereby

authorized to purchase or sell gold, silver, and foreign ex-

change in the financial markets of the United States, at

such times and in such quantities as in its discretion is nec-

essary to carry out the purposes of this Act, namely, to

regulate the value of money of the United States and of

foreign countries.

SEC. 12. (a) The Bank of the U. S. A. shall have

jurisdiction over and shall control and supervise all banking

institutions whatsoever of the United States and territories

and possessions thereof, subject to law, and shall have the

11
1

power to prescribe such rules and regulations not inconsis-

tent with the law as it may deem desirable for the safe and

proper conduct of the banks and banking institutions within

its jurisdiction.

(b) The Comptroller of the Currency and all officers

of the Government of the United States exercising any

supervisory powers or duties over the banks of the United

States, or any of them, shall carry out and perform sucb

rules and regulations for the conduct of banks and banking

institutions in the United States or territories or possessions

thereof as may, from time to time, be prescribed by the

Bank of the U. S. A. through its duly designated officers.

SEC. 13. Directly upon the passage of this Act, the

Bureau of Labor Statistics of the Department of Labor shall

be transferred to the Bank of the U. S. A., and such Bureau

shall thereafter be under the supervision of the Board of

Directors of the Bank of the U. S. A.

partment of the present Federal Reserve Board, together

with the statistical departments of the Comptroller of the

Currency, together with the statistical department of the

Bureau of Foreign and Domestic Commerce and the Bureau

of Agricultural Economics, Secretary of the Treasury, and

of the Treasurer of the United States, shall all be consolidated

with the Bureau of Labor Statistics, and the name of the

consolidated bureau and departments shall be the Bureau

The statistical de-

12
1

of United States Statistics.

The duties of said Bureau for

bureaus and departments consolidated therein, in addition to

all those now prescribed by law, shall be to collect, assemble,

and analyze authentic data, for the purpose of determining

the true and correct relation of the total amount of money in

actual circulation, including both currency and credit money

commonly called demand deposits, to prices, wages, indus-

try and commerce, the standard of living, employment and

unemployment, to the end that the Board of Directors of the

Bank of the U. S. A. and the Executive Board thereof may

scientifically and accurately determine the rate at which

progressive additions to the stock of circulating money, in-

13 cluding coin, currency, and credit, must be made in order to
14

maintain an even and stable purchasing power, and to pro-

mote a constantly rising standard of living for the people of

this Nation, unlimited except by the extent of natural

resources and the willingness of the people to work.

SEC. 14. It is hereby made mandatory upon the Board

of Directors of the Bank of the U. S. A. and the Executive

Board thereof to provide such stable purchasing power of

money and such equitable price levels, first, by the progres-

sive purchase of the bonds of the United States and the

creation of the 100 per centum reserves behind demand de-

posits, and, further, if necessary, by increasing the money in

circulation by paying the extraordinary and then the ordinary

13
1

expenses of government by currency issue until the average

commodity price level reaches the index of the Bureau of

Labor Statistics for 1926.

Bank of the U. S. A. will determine a true and equitable

commodity price level to succeed that of 1926, and it is

made mandatory on the Board of Directors to provide

issues of currency which will maintain this level.

The Board of Directors of the

SEC. 15. The Board of Directors of the Bank of the

U. S. A. shall recommend to Congress the retirement

through taxation of such excesses of currency as may be

necessary to keep the price level from rising above the

level prescribed by section 14 of this Act.

13
14

SEC. 16. All laws or parts of laws in conflict with
this Act are hereby repealed.

SEC. 17. If any provision of this Act or the applica-

tion of such provision to any person or circumstance shall

be held invalid, the remainder of this Act or the application

of such provisions to persons or circumstances other than

those as to which it is held invalid shall not be affected

thereby.

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22
23
24

SEC. 18. This Act shall take effect July 1, 1935, or
sooner by proclamation of the President.
SEC. 19. This Act may be cited as the "National
Banking and Monetary Control Act of 1935."

74TH CONGRESS
1ST SESSION

S. 2162

A BILL
To restore to Congress its constitutional power to issue
money and regulate the value thereof; to provide for
the orderly distribution of the abundance with which
a beneficent Creator has blessed u s ; to establish and
maintain the purchasing power of money at a fixed and
equitable level; to restore the values of property to
just and equitable levels; to increase the prices of
agricultural products to a point where they will yield
the cost of production plus a fair profit to the farmer;
to provide a living and just annual wage which will
enable every citizen willing to work and capable of
working to maintain and educate his family on an
increasing level or standard of living; to repay debts
with dollars of equal value ; to lift in part the burden
of taxation ; and for other purposes.

By Mr. NYE
MARCH 4 (calendar day, MARCH 5), 1935

Read

twice and referred to the Committee on
Banking and Currency

FRASER