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[PUBLIC L A W 8 4 — 7 9 T H
[CHAPTER 186—1ST

CONGRESS]
SESSION]

[S. 510]
AN

ACT

T o amend sections 11 (c) and 16 of the Federal Reserve Act, as amended, and
for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, T h a t (a) the t h i r d
paragraph of section 16 of the Federal Reserve A c t , as amended, is
amended by changing the first sentence of such paragraph to read
as follows:
" E v e r y Federal Reserve bank shall maintain reserves i n gold certificates of not less than 25 per centum against its deposits and reserves
i n gold certificates of not less than 25 per centum against its Federal
Reserve notes i n actual circulation: Provided, however, T h a t when
the Federal Reserve agent holds gold certificates as collateral f o r
Federal Reserve notes issued to the bank such gold certificates shall
be counted as p a r t of the reserve which such bank is required to maint a i n against its Federal Reserve notes i n actual circulation."
(b) The first sentence of the f o u r t h paragraph of section 16 of the
Federal Reserve A c t , as amended, is amended by s t r i k i n g therefrom
"40 per centum reserve hereinbefore required" and by inserting i n
lieu thereof "25 per centum reserve hereinbefore required to be maintained against Federal Reserve notes i n actual circulation".
(c) Subsection (c) of section 11 of the Federal Reserve A c t , as
amended, is amended to read as follows:
" ( c ) T o suspend f o r a period not exceeding t h i r t y days, and f r o m
time to time to renew such suspension for periods not exceeding
fifteen days, any reserve requirements specified i n this A c t : Provided,
T h a t i t shall establish a graduated tax upon the amounts by which
the reserve requirements of this A c t may be permitted to f a l l below
the level hereinafter specified: And provided further, T h a t when the
reserve held against Federal Reserve notes falls below 25 per centum,
the B o a r d of Governors of the Federal Reserve System shall establish a graduated tax of not more than 1 per centum per annum upon
such deficiency u n t i l the reserves f a l l to 20 per centum, and when said
reserve falls below 20 per centum, a tax at the rate increasingly o f
not less than 1 y 2 per centum per annum upon each 2y 2 per centum
or fraction thereof that such reserve falls below 20 per centum. The
tax shall be p a i d by the Reserve bank, but the Reserve bank shall add
an amount equal to said tax to the rates of interest and discount fixed
by the B o a r d of Governors of the Federal Reserve System."
SEC. 2. The second paragraph of section 16 of the Federal Reserve
A c t , as amended, is amended to read as follows:
" A n y Federal Reserve bank may make application to the local
Federal Reserve agent f o r such amount of the Federal Reserve notes
hereinbefore provided f o r as i t may require. Such application shall
be accompanied w i t h a tender t o the local Federal Reserve agent of



[ P U B . L A W 84.]

2

collateral i n amount equal to the sum of the Federal Reserve notes
thus applied f o r and issued pursuant to such application. The
collateral security thus offered shall be notes, drafts, bills of exchange,
or acceptances acquired under the provisions of section 13 of this A c t ,
or bills of exchange endorsed by a member bank of any Federal
Reserve district and purchased under the provisions of section 14 of
this A c t , or bankers' acceptances .purchased under the provisions of
said section 14, or gold certificates, or direct obligations of the U n i t e d
States. I n no event shall such collateral security be less than the
amount of Federal Reserve notes applied for. The Federal Reserve
agent shall each day n o t i f y the Board of Governors of the Federal
Reserve System of a l l issues and withdrawals of Federal Reserve
notes to and by the Federal Reserve bank to w h i c h he is accredited.
The said B o a r d of Governors of the Federal Reserve System may at
any time call upon a Federal Reserve bank f o r additional security to
protect the Federal Reserve notes issued t o i t . "
SEC. 3. A l l power and authority w i t h respect to the issuance of
circulating notes, known as Federal Reserve bank notes, pursuant to
the sixth paragraph of section 18 of the Federal Reserve A c t , as
amended by section 401 of the A c t approved M a r c h 9, 1933 (48 Stat.
1, 6), shall cease and terminate on the date of enactment of this A c t .
SEC. 4. A l l power and authority of the President and the Secret a r y of the Treasury under section 43 (b) (1) of tHe A c t approved
M a y 12,1933 (48 Stat. 31, 52), w i t h respect to the issuance o f U n i t e d
States notes, shall cease and terminate on the date of enactment of
this A c t .
Approved June 12, 1945.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102