Full text of Federal Reserve Bank of New York Circulars : 3535. Regulation T of the Board of Governors of the Federal Reserve System as Amended to July 20, 1949

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FED ERAL R E SE R V E BANK
OF NEW YORK

r Circular N o. 3 5 3 5 "1
L January 31, 1950
J

R E G U L A T IO N T OF TH E B O A R D OF GO V E R N O RS O F TH E
F E D E R A L R E SE R V E SYSTEM AS AM EN DED TO JU LY 20, 1949

T o all M em ber Banks in the
Second Federal Reserve D istrict:

Enclosed herewith is a printed copy o f Regulation T of the Board
o f Governors of the Federal Reserve System as amended to July 20,
1949, relating to extension and maintenance of credit by brokers,
dealers, and members o f national securities exchanges. The enclosed
copy of Regulation T incorporates the changes in the regulation made
by Amendment No. 8, effective May 1,1949, Amendment No. 9, effective
May 16,1949, and Amendment No. 10, effective July 20, 1949, which are
the only amendments since the last printing of the regulation in the
form as amended to A p ril 1, 1948. The Supplement to Regulation T,
effective March 30, 1949, remains unchanged.
Additional copies of the regulation and supplement will be fur­
nished upon request.




A

llan

S proul,

President.

B O A R D OF G O VERN O RS
OF T H E

FE D E R A L RESERVE SYSTEM

EXTENSION AND MAINTENANCE OF CREDIT
BY BROKERS, DEALERS, AND MEMBERS OF
NATIONAL SECURITIES EXCHANGES




R E G U L A T IO N T

As Amended to

July 20, 1949

IN Q U IR IE S R E G A R D IN G T H IS R E G U L A T IO N
A ny inquiry relating to this regulation should be addressed to a
national securities exchange o f which the person making the inquiry is
a member or the facilities of which are used for his transactions, or,
if this be not practicable, the inquiry should be addressed to the Federal
Reserve bank o f the district in which the inquiry arises. In the event
that an official o f an exchange desires information as to any such ques­
tion, he should make inquiry o f the Federal Reserve bank o f the district
in which the exchange is located.
N ote .— A mendments N os. 1 through 10 are included in this reprint.

II




CONTENTS
R e g u l a t io n ...........................................................................................

Page
1

S e c . 2. D e f in it io n s ................................................................................................................

1

S e c . 3. G e n e r a l A ccounts
(а) C ontents o f general a cco u n t.................................................................
(б) General rule................................................................................................
(c) M axim um loan value and current m arket v a lu e ..........................
(d) A djusted debit b a la n ce...................... ...................................................
(e) Liquidation in lieu o f d e p o sit..............................................................
(f) Extensions o f tim e ...................................................................................
(g) Transactions on given d a y ....................................................................
(h) Unissued securities...............................................................'...................

2
2
3
4
4
5
5
5

S ec . 1. S cope

of

Se c . 4. S pe cia l
(a)
(b)
(c)
(d)
(e)
( /)
(g)
(h)

A ccounts
General ru le................................................................................................
Special om nibus a ccou n t........................................................................
Special cash a cco u n t................................................................................
Special arbitrage a c c o u n t......................................................................
Special com m odity a cco u n t..................................................................
Special miscellaneous a cco u n t.............................................................
Specialist’s a c c o u n t..................................................................................
Special subscriptions a cco u n t...............................................................

6
6
6
9
9
9
10
11

S ec . 5. B orrow in gs b y M e m be r s , B r o k e r s , and D ealers
(a) General rule................................................................................................
(b) Agreements o f nonm em ber b a n k s ......................................................
(c) Borrow ing from other cred itors..........................................................

12
12
12

Se c . 6. C er ta in T echnical D etails
(a) A ccounts o f partners...............................................................................
(b) C ontribution to jo in t a dven tu re.........................................................
(c) Guaranteed a cco u n ts..............................................................................
(d) Transfer o f a ccou n ts................................................................................
(e) R eorganizations.............................. .........................................................
(J) T im e o f receipt o f funds or securities...............................................
(0) Interest, service charges, e tc .................................................................
(h) B orrow ing and lending securities........................................................
(1) C redit for clearance o f securities........................................................
(j) Foreign cu rren cy.....................................................................................
(k) Innocent m istakes....................................................................................

13
13
13
13
13
13
14
14
15
15
15

S e c . 7. M iscellaneou s P rovisions
(a) Arranging for loans b y oth ers.............................................................
(b) M aintenance o f cr e d it............................................................................
(c) Declaration as to purpose o f lo a n ......................................................
(d) R ep orts........................................................................... ............................
(e) A dditional requirements b y exchanges and cred itors..................

15
15
16
16
16

A p p e n d ix ......................................................................................................................................

17




III

R E G U L A T IO N T
As Amended to July 20, 1949
EXTE N SIO N AND MAINTENANCE O F C R E D IT B Y B R O K E R S ,
D E A L E R S, AND M EM BE R S O F N ATIO N AL
SE C U R ITIE S EXCH ANGES
SECTION 1. SCOPE OF REGULATION

This regulation is issued by the Board o f Governors of the Federal
Reserve System (hereinafter called the “ B oard” ) pursuant to the
Securities Exchange Act of 1934 (hereinafter called the “ A ct” ), par­
ticularly sections 7 and 8 (a ) thereof, and applies to every member of
a national securities exchange and to every broker or dealer who trans­
acts a business in securities through the medium o f any such member.
SECTION 2. DEFINITIONS

For the purposes of this regulation, unless the context otherwise
requires:
(a ) The terms “ p erson ” , “ m e m b e r” , “ b r o k e r ” , “ d ea ler” , “ b u y ” ,
“ p u rch a se” , “ sale” , “ sell” , “ secu rity” , and “ b a n k ” have the mean­
ings given them in section 3 (a ) of the Act, pertinent parts o f which
are printed in the appendix to this regulation.
(b ) The term “ cre d ito r” means any member o f a national securi­
ties exchange or any broker or dealer who transacts a business in
securities through the medium o f any such member.
(c) The term “ cu stom er” includes any person, or any group of
persons acting jointly, (1) to or for whom a creditor is extending or
maintaining any credit, or (2) who, in accordance with the ordinary
usage o f the trade, would be considered a customer o f the creditor.
It includes, in case the creditor is a firm, any partner in the firm who
would be considered a customer of the firm if he were not a partner,
and includes any joint adventure in which a creditor participates and
which would be considered a customer o f the creditor if the creditor
were not a participant.
(d) The term “ registered security” means any security which (1)
is registered on a national securities exchange; or (2) in consequence
of its having unlisted trading privileges on a national securities ex­
change is deemed, under the provisions o f section 1 2(f) of the A ct. to
be registered on a national securities exchange; or (3) is exempted by
the Securities and Exchange Commission from the operation o f section
7 ( c ) ( 2 ) of the Act only to the extent necessary to render lawful any




2

R E G U L A T IO N

T

S e c s . 2 ,3

direct or indirect extension or maintenance o f credit on such security
or any direct or indirect arrangement therefor which would not have
been unlawful if such security had been a security (other than an
exempted security) registered on a national securities exchange.
(e) The term “ ex em p ted secu rity” has the meaning given it in sec­
tion 3 (a ) o f the Act except that the term does not include a security
which is exempted by the Securities and Exchange Commission from
the operation o f section 7 ( c ) ( 2 ) o f the Act only to the extent described
in subdivision (3) o f section 2 (d ) o f this regulation.
SECTION 3. GENERAL ACCOUNTS

(a) C ontents o f gen eral a ccou n t.— All financial relations between
a creditor and a customer, whether recorded in one record or in more
than one record, shall be included in and be deemed to be parts o f the
customer’s general account with the creditor, except that the relations
which section 4 permits to be included in any special account provided
for by that section m ay be included in the appropriate special account,
and all transactions in commodities for or with any customer shall be
included in the special com m odity account provided for by sections
4 (a ) and 4 (e ). During any period when the supplement to this
regulation specifies that registered securities (other than exempted
securities) shall have no loan value in a general account, any trans­
action consisting o f a purchase of a security other than a purchase
o f an exempted security or a purchase o f a security to reduce or close
out a short position shall be effected in the special cash account pro­
vided for by section 4 (c ) or in some other appropriate special account
provided for by section 4.
( b ) G eneral ru le.— A creditor shall not effect for or with any cus­
tomer in a general account any transaction which, in combination with
the other transactions effected in the account on the same day, creates
an excess o f the adjusted debit balance of the account over the m axi­
mum loan value o f the securities in the account, or increases any such
excess, unless in connection therewith the creditor obtains, as promptly
as possible and in any event before the expiration o f three full business
days following the date o f such transaction, the deposit into the account
o f cash or securities in such amount that the cash deposited plus the
maximum loan value o f the securities deposited equals or exceeds the
excess so created or the increase so caused.
A transaction consisting of a withdrawal o f cash or registered or
exempted securities from a general account shall be permissible only
on condition that no cash or securities need to be deposited in the ac­




S ec. 3

R E G U L A T IO N

T

3

count in connection with a transaction on a previous day and that, in
addition, the transactions (including such withdrawal) on the day of
such withdrawal would not create an excess o f the adjusted debit
balance o f the account over the maximum loan value o f the securities
in the account or increase any such excess.
Rules for computing the maximum loan value o f the securities in
a general account and the adjusted debit balance o f such an account are
provided in sections 3 (c ) and 3 (d ), and certain modifications of and
exceptions to the general rule stated above are provided in the subse­
quent subsections o f this section and in section 6.
(cl M axim u m loan value and cu rren t m ark et valu e.— The maxi­
mum loan value of the securities in a general account is the sum o f the
maximum loan values o f the individual securities in the account, in­
cluding securities (other than unissued securities) bought for the ac­
count but not yet debited thereto, but excluding securities sold for the
account whether or not payment has been credited thereto.
<Except as otherwise provided in this section 3 ( c ) , the maximum
loan value of a registered security (other than an exempted security)
in a general account shall be such maximum loan value as the Board
shall prescribe for general accounts from time to time in the supple­
ment to this regulation, and the maximum loan value of an exempted
security shall be as determined by the creditor in good faith. X o
collateral other than registered securities or exempted securities shall
have any loan value in a general account.
A warrant or certificate which evidences only a right to subscribe
to or otherwise acquire any security and which expires within ninety
days of issuance shall have no loan value in a general account; but, ii"
the account contains, in addition to such warrant or certificate, the
security to the holder o f which such warrant or certificate lias been
issued, the current market value of such security (if the security be a
registered security) shall, for the purpose o f calculating its maximum
loan value, be increased by the current market value o f such warrant
or certificate.
For the current market value o f a security throughout the day of
its purchase or sale, the creditor shall use its total cost or the net
proceeds o f its sale, as the case may be, and at any other time shall
use the closing sale price o f the security on the preceding business day
as shown by any regularly published reporting or quotation service.
In the absence o f any such closing sale price, the creditor may use any
reasonable estimate o f the market value o f such security as of the close
o f business on such preceding business day.




4

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Sec. 3

( d ) A dju sted d ebit b alan ce.— For the purposes o f this regulation,
the adjusted debit balance o f a general account shall be calculated by
taking the sum o f the following items:
(1) the net debit balance, if any, o f the account;
(2) the total cost o f any securities (other than unissued securi­
ties) bought for the account but not yet debited thereto;
(3) the current market value o f any securities (other than un­
issued securities) sold short in the account plus, for each such
security (other than an exempted security), such amount as the
Board shall prescribe from time to time in the supplement to this
regulation as the margin required for such short sales, except that
such amount so prescribed in the supplement need not be included
when there are held in the account securities exchangeable or con­
vertible within a reasonable time, without restriction other than
the payment of money, into such securities sold short;
(4) the amount o f margin specified by section 3 (h ) for every
net commitment in the account in unissued securities, plus all un­
realized losses on each commitment in unissued securities and
minus all unrealized gains (not exceeding the required margin) on
each commitment in unissued securities; and
(5) the amount o f any margin customarily required by the
creditor in connection with his endorsement or guarantee of any
put, call or other o p tion ;
and deducting therefrom the sum of the following items:
(6) the net credit balance, if any, of the account; and
(7) the net proceeds o f sale o f any securities (other than un­
issued securities) sold for the account but for which paym ent has
not yet been credited thereto.
In case the general account is the account of a partner of the creditor
or the account o f a joint adventure in which the creditor participates,
the adjusted debit balance shall be computed according to the fore­
going rule and the supplementary rules prescribed in sections 6 (a )
and 6 (b ).
(e) L iqu id a tion in lieu o f d e p o s it.* — In any case in which the de­
posit required by section 3 (b ), or any portion thereof, is not obtained
by the creditor within the three-day period specified in that section,
securities shall be sold or covering or other liquidating transactions
• This requirement relates to the artion to he taken when a customer fails to make the deposit
required by section 3 (b ). and it is not intended to countenance on the part o f customers the practice
commonly known as “ free-riding" or “ three-dav riding” , to prevent which the principal national
securities exchanges have adopted certain rules. See the rules o f such exchanges and section
7(e) o f this regulation.




S ec. 3

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5

shall be effected in the account, prior to the expiration o f such threedav period, in such amount that the resulting decrease in the adjusted
debit balance o f the account exceeds, by an amount at least as great
as such required deposit or the undeposited portion thereof, any result­
ing decrease in the maximum loan value o f the securities in the account.
(/) E xten sion s o f tim e.— In exceptional cases, the three-day period
specified in section 3 (b ) m ay, on application o f the creditor, be ex­
tended for one or more limited periods commensurate with the circum ­
stances by any regularly constituted committee o f a national securities
exchange having jurisdiction over the business conduct o f its members,
o f which exchange the creditor is a member or through which his trans­
actions are effected, provided such committee is satisfied that the
creditor is acting in good faith in making the application and that the
circumstances are in fact exceptional and warrant such action.
(g ) T ran sactions o n given d ay.— For the purposes of section 3 (b ),
the question o f whether or not an excess o f the adjusted debit balance
o f a general account over the maximum loan value o f the securities in
the account is created or increased on a given day shall be determined
on the basis o f all the transactions in the account on that day exclusive
o f any deposit o f cash, deposit o f securities, covering transaction or
other liquidation that has been effected on the given day, pursuant to
the requirements o f section 3 (b ) or 3 (e ), in connection with a transac­
tion on a previous day.
(h) U nissued securities.— The amount to be included in the ad­
justed debit balance o f a general account as the margin required for a
net long commitment in unissued securities shall be the current market
value of the net amount of unissued securities long minus the maximum
loan value which such net amount o f securities would have if they were
issued registered securities held in the account; and the amount to be
so included as the margin required for a net short commitment in
unissued securities shall be the amount which would be required as
margin for the net amount of unissued securities short if such securities
were issued securities and were sold short in the account: Provided,
That no amount need be included as margin for a net short commitment
in unissued securities when there are held in the account securities in
respect o f which the unissued securities are to be issued, nor for any
net position in unissued securities that are exempted securities.
Whenever a creditor, pursuant to a purchase o f an unissued security
for a customer, receives an issued security which is not a registered or
exempted security, the creditor shall treat any payment by him for
such issued security as a transaction (other than a withdrawal) which




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S k cs. 3, 4

increases the adjusted debit balance o f the account by the amount of
the payment minus the amount required to be included in the adjusted
debit balance o f the account, at the time o f and in connection with
the purchase o f the unissued security, as the margin required for such
purchase.
SECTION 4 SPECIAL ACCOUNTS

(a ) G eneral ru le.— Pursuant to this section 4, a creditor may estab­
lish for any customer one or more special accounts.
Each such special account shall be recorded separately and shall be
confined to the transactions and relations specifically authorized for
such account by the appropriate subsection o f this section and to trans­
actions and relations incidental to those specifically authorized. An
adequate record shall be maintained showing for each such account the
full details o f all transactions in the account.
A special account established pursuant to this section shall not be
used in any way for the purpose o f evading or circumventing any of
the provisions of this regulation. If a customer has with a creditor
both a general account and one or more such special accounts, the
creditor shall treat each such special account as if the customer had
with the creditor no general account.
The only other conditions to which transactions in such special a c­
counts shall be subject under the provisions o f this regulation shall be
such conditions as are specified in the appropriate subsection of this
section and in sections 2, 6 and 7.
(b ) S pecial o m n ib u s a ccou n t.— In a special omnibus account, a
member of a national securities exchange m ay effect and finance trans­
actions for a broker or dealer from whom the member accepts in good
faith a signed statement to the effect that he is subject to the pro­
visions o f this regulation (or that he does not extend or maintain
credit to or for customers except in accordance therewith as if he were
subject thereto) and from whom the member receives (1) written
notice, pursuant to a rule o f the Securities and Exchange Commission
concerning the hypothecation o f customers’ securities by brokers or
dealers (Rule X -8 C -1 or Rule X -1 5 C 2 -1 ), to the cffect that all securi­
ties carried in the account will be carried for the account o f the
customers o f the broker or dealer an<} (2) written notice that any short
sales effected in the account will be short sales made in behalf o f the
customers of the broker or dealer other than his partners.
(c) S pecial cash a ccou n t.— (1) In a special cash account, a credi­
tor may effect for or with any customer bona fide cash transactions in
securities in which the creditor m ay—




S ec. 4

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7

(A ) purchase any security for, or sell any security to, any cus­
tomer, provided funds sufficient for the purpose are already held
in the account or the purchase or sale is in reliance upon an agree­
ment accepted by the creditor in good faith that the customer
will promptly make full cash payment for the security and that
the customer does not contemplate selling the security prior to
making such paym ent; or
(B> sell any security for, or purchase any security from, any
customer, provided the security is held in the account or the
creditor is informed that the customer or his principal owns the
security and the purchase or sale is in reliance upon an agreement
accepted by the creditor in good faith that the security is to be
promptly deposited in the account.
(2) In case a customer purchases a security (other than an exempted
security I in the special cash account and does not make full cash p ay­
ment for the security within 7 days after the date on which the security
is so purchased, the creditor shall, except as provided in the succeeding
subdivisions o f this section 4 (c ), promptly cancel or otherwise liquidate
the transaction or the unsettled portion thereof.
(3) If the security when so purchased is an unissued security, the
period applicable to the transaction under subdivision (2) o f this sec­
tion 4 (c ) shall be 7 days after the date on which the security is made
available by the issuer for delivery to purchasers. If the security when
so purchased is a “ when distributed” security which is to be distributed
in accordance with a published plan, the period applicable to the trans­
actions under subdivision (2) o f this section 4 (c ) shall be 7 days after
the date on which the security is so distributed.
(4) If any shipment o f securities is incidental to the consummation
o f the transaction, the period applicable to the transaction under sub­
division (2) of this section 4 (c ) shall be deemed to be extended by the
number o f days required for all such shipments, but not by more than
7 days.
(5) If the creditor, acting in good faith in accordance with subdivi­
sion (1) of this section 4 (c ), purchases a security for a customer, or
sells a security to a customer, with the understanding that lie is to
deliver the security prom ptly to the customer, and the full cash p ay­
ment to be made promptly by the customer is to be made against such
delivery, the creditor may at his option treat the transaction as one to
which the period applicable under subdivision (2) o f this section 4( c)
is not the 7 days therein specified but 35 days after the date o f such
purchase or sale.




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S ec. 4

(6) I f an appropriate committee of a national securities exchange
or a national securities association is satisfied that the creditor is acting
in good faith in making the application, that the application relates
to a bona fide cash transaction, and that exceptional circumstances
warrant such action, such committee, on application o f the creditor,
m ay (A ) extend any period specified in subdivision (2 ), (3 ), (4) or ( 5 1
o f this section 4 (c ) for one or more limited periods commensurate with
the circumstances, or (B ), in case a security purchased by the customer
in the special cash account is a registered or exempted security, author­
ize transfer o f the transaction to a general account or special omni­
bus account and com pletion o f the transaction pursuant to the pro­
visions o f this regulation relating to such an account.
(7) The 7-day periods specified in this section 4 (c ) refer to 7 full
business days. T h e 35-day period and the 90-day period specified
herein refer to calendar days, but if the last day o f any such period is
a Saturday, Sunday, or holiday, such period shall be considered to end
on the next full business day. For the purposes o f this section 4 (c ),
a creditor may, at his option, disregard any sum due by the customer
not exceeding $100.
(8) Unless funds sufficient for the purpose are already in the ac­
count, no security other than an exempted security shall be purchased
for, or sold to, any customer in a special cash account with the creditor
if any security other than an exempted security has been purchased
by such customer in such an account during the preceding 90 days,
and then, for any reason whatever, without having been previously
paid for in full by the customer, the security has been sold in the
account or delivered out to any broker or dealer: Provided, that an
appropriate committee o f a national securities exchange or a national
securities association, on application o f the creditor, may authorize
the creditor to disregard for the purposes of this section 4 ( c ) ( 8 ) any
given instance o f the type therein described if the committee is satis­
fied that both creditor and customer are acting in good faith and that
circumstances warrant such authorization. For the purposes o f this
section 4 ( c ) ( 8 ) , the cancellation o f a transaction, otherwise than to
correct an error, shall be deemed to constitute a sale. The creditor
may disregard for the purposes o f this section 4 ( c ) ( 8 ) a sale without
prior payment provided full cash payment is received within the period
described by subdivision (2) o f this section 4 (c ) and the customer has
not withdrawn the proceeds o f sale on or before the day on which
such payment (and also final payment of any check received in that
connection) is received. The creditor may so disregard a delivery o f a




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9

security to another broker or dealer provided such delivery was for
deposit into a special cash account which the latter broker or dealer
maintains for the same customer and in which account there are already
sufficient funds to pay for the security so purchased ; and for the pur­
pose o f determining in that connection the status o f a custom er’s
account at another broker or dealer, a creditor may rely upon a written
statement which he accepts in good faith from such other broker or
dealer.
(d) S pecial arbitrage accou n t.— In a special arbitrage account, a
member o f a national securities exchange may effect and finance for
any customer bona fide arbitrage transactions in securities. For the
purposes o f this subsection, the term “ arbitrage” means (1) a pur­
chase or sale o f a security in one market together with an offsetting
sale or purchase o f the same security in a different market at as nearly
the same time as practicable, for the purpose of taking advantage o f a
difference in prices in the two markets, or (2) a purchase of a security
which is, without restriction other than the payment o f money, ex­
changeable or convertible within a reasonable time into a second se­
curity together with an offsetting sale at or about the same time of
such second security, for the purpose o f taking advantage o f a disparity
in the prices o f the two securities.
(e ) S pecial co m m o d ity a ccou n t.— In a special com m odity account,
a creditor may effect and carry for any customer transactions in
commodities.
( /) S p ecial m iscellan eou s a ccou n t.— In a special miscellaneous ac­
count, a creditor may—
(1) with the approval o f any regularly constituted committee
o f a national securities exchange having jurisdiction over the busi­
ness conduct o f its members, make and maintain loans to meet the
emergency needs o f any creditor;
(2) make loans, and m ay maintain loans, to or for any partner
<»f a firm which is a member o f a national securities exchange to
enable such partner to make a contribution o f capital to such firm
provided (A ) the lender as well as the borrower is a partner in
such firm, or (B ) the lender as well as the borrower is a member
o f such exchange, the loan has the approval of an appropriate
committee o f the exchange, and the committee, in addition to
being satisfied that the loan is not in contravention o f any rule
o f the exchange, is satisfied that the loan is outside the ordinary
course o f the lender’s business, and that, if the borrower’s firm




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S ec. 4

does any dealing in securities for its own account, the loan is not
for the purpose o f enabling the firm to increase the amount of
such dealing;
(3)
purchase any security from any customer who is a broker
or dealer, or sell any security to any such customer, provided the
creditor acting in good faith purchases or sells the security for
delivery, against full payment o f the purchase price, as promptly
as practicable in accordance with the ordinary usage o f the trade;
(41 effect and finance, for any member o f a national securities
exchange who is registered and acts as an odd-lot dealer in securi­
ties on the exchange, such member’s transactions as an odd-lot
dealer in such securities, or effect and finance, for any joint adven­
ture in which the creditor participates, any transactions in any
securities o f an issue with respect to which all participants, or all
participants other than the creditor, are registered and act on a
national securities exchange as odd-lot dealers;
(5) effect transactions for and finance any joint adventure or
group in which the creditor participates and in which all par­
ticipants are dealers (whether such participants be acting jointly
or severally), or any member thereof or participant therein, for
the purpose o f facilitating the underwriting or distributing of all
or part o f an issue o f securities (A ) not through the medium o f a
national securities exchange, or (B ) the distribution o f which has
been approved by the appropriate committee o f a national securi­
ties exchange;
(6) effect for any customer the collection or exchange (other
than by sale or purchase) of securities deposited by the customer
specifically for such purposes, and (subject to any other applicable
provisions o f law) receive from or for any customer, and pay out
or deliver to or for any customer, any money or securities;
(7) effect and carry for any customer transactions in foreign
exchange; and
(81 extend and maintain credit to or for any customer without
collateral or on any collateral whatever for any purpose other than
purchasing or carrying or trading in securities.
(g)
S pecialist’ s a ccou n t.— In a special account designated as a
specialist’s account, a creditor may effect and finance, for any member
o f a national securities exchange who is registered and acts as a spe­
cialist in securities on the exchange, such member’s transactions as a
specialist in such securities, or effect and finance, for any joint adven­




Sec. 4

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11

ture in which the creditor participates, any transactions in any securi­
ties o f an issue with respect to which all participants, or all participants
other than the creditor, are registered and act on a national securities
exchange as specialists. Such specialist’s account shall be subject to
the same conditions to which it would be subject if it were a general
account except that if the specialist’s exchange, in addition to the other
requirements applicable to specialists, is designated by the Board of
Governors o f the Federal Reserve System as requiring reports suitable
for supplying current information regarding specialists’ use o f credit
pursuant to this section 4( g) , the requirements o f section 6( b) regard­
ing joint adventures shall not apply to such account and the maximum
loan value o f a registered security in such account shall be as deter­
mined by the creditor in good faith.
(h)
Special su bscrip tion s accou n t.— In a special subscriptions a c­
count a creditor may effect and finance the acquisition o f a registered
security for a customer through the exercise o f a right to acquire such
security which is evidenced by a warrant or certificate issued to stock­
holders and expiring within 90 days of issuance, and such special sub­
scriptions account shall be subject to the same conditions to which it
would be subject if it were a general account except that—
(1) each such acquisition shall be treated separately in the
account, and prior to initiating the transaction the creditor shall
obtain a deposit o f cash in the account such that the cash deposited
plus the maximum loan value o f the securities so acquired equals
or exceeds the subscription price, giving effect to a maximum loan
value for the securities so acquired o f 75 per cent o f their current
market value as determined by any reasonable m ethod;
(2) the creditor shall not permit any withdrawal o f cash or
securities from the account so long as there is a debit balance in
the account, except that when the debit connected with a given
acquisition o f securities in the account has become equal to or
less than the maximum loan value of such securities as prescribed
for general accounts, such securities may be transferred to the gen­
eral account together with any remaining portion o f such d e b it;
and
(3) no security may be acquired in the account at any time
when the account contains any security which has been held
therein more than nine months without becoming eligible for
transfer to the general account.
In order to facilitate the exercise o f a right in accordance with the

J



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S e c s . 4. 5

provisions of this section, a creditor may permit the right to be trans­
ferred from a general account to the special subscriptions account
without regard to any other requirement of this regulation.

SECTION 5. BORROWINGS BY MEMBERS. BROKERS, AND DEALERS

(a) G en eral ru le.— It is unlawful for any creditor, directly or indi­
rectly, to borrow in the ordinary course o f business as a broker or
dealer on any registered security (other than an exempted security)
except—
(1) from or through a member bank o f the Federal Reserve
System ; or
(2) from any nonmember bank which shall have filed with the
Board an agreement which is still in force and which is in the form
prescribed by this regulation; or
(3) to the extent to which, under the provisions o f this regula­
tion, loans are permitted between members of a national securities
exchange a n d /or brokers a n d /o r dealers, or loans are permitted to
meet emergency needs.
(b) A greem en ts o f n o n m e m b e r b an k s.— An agreement filed pur­
suant to section 8 (a ) o f the Act by a bank not a member o f the Fed­
eral Reserve System shall be substantially in the form contained in
Form F. R. T -2 if the bank has its principal place o f business in a
territory or insular possession o f the United States, or if it has an office
or agency in the United States and its principal place o f business out­
side the United States. The agreement filed by any other nonmember
bank shall be in substantially the form contained in Form F. R . T - l .
Any nonmember bank which has executed any such agreement may
terminate the agreement if it obtains the written consent o f the Board.
Blank forms o f such agreements, information regarding their filing or
termination, and information regarding the names o f nonmember banks
for which such agreements are in force, m ay be obtained from any
Federal Reserve bank.
(c) B orrow in g fr o m oth er cred itors.— A creditor may borrow
from another creditor in the ordinary course o f business as a broker or
dealer on any registered security to the extent and subject to the terms
upon which the latter may extend credit to him in accordance with the
provisions o f this regulation, and subject to any other applicable pro­
visions o f law.




Sec. 6

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SECTION <J. CERTAIN TECHNICAL DETAILS

(a) A ccou n ts o f p artn ers.— In case a general account is the account
o f a partner of the creditor, the creditor, in calculating the adjusted
debit balance o f such account and the maximum loan value o f the se­
curities therein, shall disregard the partner’s financial relations with the
firm as reflected in his capital and ordinary drawing accounts.
( b ) C on trib u tion to jo in t a dven tu re.— In case a general account
is the account o f a joint adventure in which the creditor participates,
the adjusted debit balance o f the account shall include, in addition to
the items specified in section 3 (d ), any amount by which the creditor’s
contribution to the joint adventure exceeds the contribution which he
would have made if he had contributed merely in proportion to his
right to share in the profits o f the joint adventure.
(c) G uaranteed a ccou n ts.— N o guarantee o f a customer’s account
shall be given any effect for purposes of this regulation.
(d ) T ra n sfer o f accou n ts.— In the event o f the transfer o f a gen­
eral account from one creditor to another, such account may be treated
for the purposes o f this regulation as if it had been maintained by the
transferee from the date o f its origin: Provided, That the transferee
accepts in good faith the signed statement o f the transferor that no
cash or securities need be deposited in the account in connection with
any transaction that has been effected in the account or, in case he
finds that it is not practicable to obtain such a statement from the
transferor, accepts in good faith such a signed statement from the
customer.
In the event o f the transfer o f a general account from one customer
to another, such account may be treated by the creditor for the pur­
poses o f this regulation as if it had been maintained for the transferee
from the date o f its origin.
(e) R eorg a n iza tion s.— A creditor may, without regard to the other
provisions of this regulation, effect for a customer the exchange o f any
registered or exempted security in a general account for the purpose of
participating in a reorganization or recapitalization in which the
security is involved: Provided, That if an unregistered nonexempted
security is acquired in exchange, the creditor shall not, for a period
of sixty days following such acquisition, permit the withdrawal of such
security or the proceeds o f its sale from the customer’s account except
to the extent that such security or proceeds could be withdrawn if the
security were a registered security.
( /) T im e o f receip t o f fu n d s o r securities.— For the purposes of
this regulation, a creditor m ay, at his option (1) treat the receipt in




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S ec. 6

good faith o f any check or draft drawn on a bank which in the ordinary
course o f business is payable on presentation, or any order on a savings
bank with passbook attached which is so payable, as receipt o f p a y ­
ment o f the amount o f such check, draft or order; (2) treat the ship­
ment o f securities in good faith with sight draft attached as receipt of
payment o f the amount o f such sight d raft; and (3) in the case o f the
receipt in good faith o f written or telegraphic notice in connection with
a special omnibus account o f a customer not located in the same city
that a specified security or a check or draft has been dispatched to the
creditor, treat the receipt o f such notice as receipt o f such security,
check or draft: Provided, however, That if the creditor receives notice
that such check, draft, order, or sight draft described in clause ( 1) , (2)
or (3) is not paid on the day o f presentation, or if such security, check
or draft described in clause (3) is not received by the creditor within
a reasonable time, the creditor shall promptly take such action as he
would have been required to take by the appropriate provisions o f this
regulation if the provisions o f this subsection had not been utilized.
(g) Interest, service ch arges, etc.— Interest on credit maintained
in a general account, communication charges with respect to transac­
tions in the account, shipping charges, premiums on securities borrowed
in connection with short sales or to effect delivery, dividends or other
distributions due on borrowed securities, and any service charges (other
than commissions) which the creditor may impose, may be debited to
the account in accordance with the usual practice and without regard
to the other provisions o f this regulation, but such items so debited
shall be taken into consideration in calculating the net credit or net
debit balance o f the account.
A creditor may, without regard to the other provisions o f this regu­
lation, pay to or for a customer from a general account interest or
cash dividends collected by the creditor for such account, if such p ay­
ment is made within 35 days after the day on which, in accordance
with the creditor’s usual practice, such interest or dividends are
credited to the account, and if the crediting thereof has not served
in the meantime to permit in the account any purchase o f securities
or other transactions which could not otherwise have been effected
in accordance with this regulation.
Ih) B o rro w in g and lend in g securities.— W ithout regard to the
other provisions o f this regulation, a creditor (1) m ay make a bona fide
deposit o f cash in order to borrow securities (whether registered or
unregistered! for the purpose of making delivery o f such securities in
the case of short sales, failure to receive securities he is required to




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15

deliver, or other similar cases, and (2) may lend securities for such
purpose against such a deposit.
(?) C redit f o r clearan ce o f securities.— The extension or mainte­
nance o f any credit which is maintained for only a fraction o f a day
(that is, for only part of the time between the beginning o f business
and midnight on the same d ay) shall be disregarded for the purposes
o f this regulation, if it is incidental to the clearance o f transactions in
securities directly between members or through an agency organized
or employed by the members o f a national securities exchange for the
purpose o f effecting such clearance.
(j ) F oreign cu rre n cy .— If foreign currency is capable o f being con­
verted without restriction into United States currency, a creditor act­
ing in good faith m ay treat any such foreign currency in an account as
a credit to the account in^an amount determined in accordance with
customary practice.
(k ) In n ocen t m istakes.— I f any failure to com ply with this regu­
lation results from a mistake made in good faith in executing a trans­
action, recording, determining, or calculating any loan, balance, market
price or loan value, or other similar matter, the creditor shall not be
deemed guilty o f a violation of this regulation if promptly after the
discovery o f the mistake he takes whatever action m ay be practicable
in the circumstances to remedy the mistake.
SECTION 7. M ISCELLAN EO U S PROVISION S

(a)
A rra n gin g f o r loans by oth ers.— A creditor may arrange for
the extension or maintenance of credit to or for any customer o f such
creditor by any person upon the same terms and conditions as those
upon which the creditor, under the provisions o f this regulation, may
himself extend or maintain such credit to such customer, but only upon
such terms and conditions, except that this limitation shall not apply
with respect to the arranging by a creditor for a bank subject to Regu­
lation U to extend or maintain credit on registered securities or
exempted securities.
Ib ) M aintenance o f cred it.— Except as otherwise specifically for­
bidden by this regulation, any cxedit initially extended without viola­
tion of this regulation m ay be maintained regardless of (1) reductions
in the customer’s equity resulting from changes in market prices, ( 2 1
the fact that any security in an account ceases to be registered or
exempted, and (31 any change in the maximum loan values or margin
requirements prescribed by the Board under this regulation. In main­




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S ec. 7

taining any such credit, the creditor may accept or retain for his own
protection additional collateral of any description, including unreg­
istered securities.
(c) D eclaration as to p u rp o se o f loa n .— Every extension o f credit
on a registered security (other than an exempted security) shall be
deemed to be for the purpose o f purchasing or carrying or trading in
securities, unless the customer shall file with the creditor a written
declaration signed by the customer which shall state the use to be made
o f such credit and which shall state specifically that such credit is
neither for the purpose o f purchasing or carrying or trading in securi­
ties nor for the purpose o f evading or circumventing the provisions of
this regulation. In connection with any extension o f credit, a creditor
may rely upon such a written declaration unless he knows the state­
ment to be false or has information which would put a prudent man
upon inquiry and if investigated with reasonable diligence would lead
to the discovery o f the falsity o f the statement.
(d) R ep orts.— Every creditor shall make such reports as the Board
may require to enable the Board to perform the functions conferred
upon it by the Act.
(e) A d d ition a l req u irem en ts by exch an ges and cre d ito rs.— N oth­
ing in this regulation shall (1) prevent any exchange from adopting
and enforcing any rule or regulation further restricting the time or
manner in which its members must obtain initial or additional margin
in customers’ accounts because o f transactions effected in such ac­
counts, or requiring such members to secure or maintain higher margins,
or further restricting the amount o f credit which may be extended or
maintained by them, or (2) m odify or restrict the right of any creditor
to require additional security for the maintenance of any credit, to
refuse to extend credit, or to sell any securities or property held as
collateral for any loan or credit extended by him.




A P P E N D IX
There are printed below certain provisions o f the Securities Exchange
Act o f 1934 (U.S.C., Title 15, sec. 78) which are pertinent to the
subject matter o f this regulation:
Sec. 3. (a) * * *
(3) The term “ member” when used with respect to an exchange
means any person who is permitted either to effect transactions on
the exchange without the services o f another person acting as
broker, or to make use o f the facilities o f an exchange for trans­
actions thereon without payment o f a commission or fee or with
the payment o f a commission or fee which is less than that charged
the general public, and includes any firm transacting a business
as broker or dealer o f which a member is a partner, and any
partner o f any such firm.
(4) The term “ broker” means any person engaged in the busi­
ness of effecting transactions in securities for the account o f others,
but does not include a bank.
(5) The term “ dealer” means any person engaged in the busi­
ness o f buying and selling securities for his own account, through
a broker or otherwise, but does not include a bank, or any person
insofar as he buys or sells securities for his own account, either
individually or in some fiduciary capacity, but not as a part o f a
regular business.
(6) The term “ bank” means (A ) a banking institution organ­
ized under the laws o f the United States, ( B ) a member bank of
the Federal Reserve System, (C ) any other banking institution,
whether incorporated or not, doing business under the laws of
any State or o f the United States, a substantial portion o f the
business o f which consists o f receiving deposits or exercising
fiduciary powers similar to those permitted to national banks
under section 11 (k) o f the Federal Reserve A ct, as amended, and
which is supervised and examined by State or Federal authority
having supervision over banks, and which is not operated for the
purpose of evading the provisions o f this title, and (D ) a receiver,
conservator, or other liquidating agent o f any institution or firm
included in clauses ( A) , (B ), or (C ) o f this paragraph.
* * * * *
(9) The term “ person” means an individual, a corporation, a
partnership, an association, a joint-stock com pany, a business
trust, or an unincorporated organization.
(10) T h e term “ security” means any note, stock, treasury stock,
bond, debenture, certificate of interest or participation in any
profit-sharing agreement or in any oil, gas, or other mineral
royalty or lease, any collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate o f deposit, for a security, or in
general, any instrument com monly known as a “ security” ; or any




R E G U L A T IO N

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certificate o f interest or participation in. temporary or interim
certificate for, receipt for, or warrant or right to subscribe to or
purchase, any o f the foregoing; but shall not include currency or
any note, draft, bill o f exchange, or banker’s acceptance which has
a maturity at the time o f issuance o f not exceeding nine months,
exclusive o f days o f grace, or any renewal thereof the maturity
of which is likewise limited.
(121 The term “ exempted security” or “ exempted securities”
shall include securities which are direct obligations of or obliga­
tions guaranteed as to principal or interest by the United States;
such securities issued or guaranteed by corporations in which the
United States has a direct or indirect interest as shall be designated
for exemption by the Secretary o f the Treasury as necessary or ap­
propriate in the public interest or for the protection o f investors;
securities which are direct obligations of or obligations guaranteed
as to principal or interest by a State or any political subdivision
thereof or any agency or instrumentality of a State or any political
subdivision thereof or any municipal corporate instrumentality of
one or more States; and such other securities (which may include,
among others, unregistered securities, the market in which is pre­
dominantly intrastate) as the Commission may, by such rules and
regulations as it deems necessary or appropriate in the public in­
terest or for the protection of investors, either unconditionally or
upon specified terms and conditions or for stated periods, exempt
from the operation o f any one or more provisions o f this title which
by their terms do not apply to an “ exempted security” or to “ ex­
empted securities.”
(13) The terms “ b uy” and “ purchase” each include any con­
tract to buy, purchase, or otherwise acquire.
(14) The terms “ sale" and "sell” each include any contract to
sell or otherwise dispose of.
Sec. 3. (b> The Commission and the Board o f Governors o f
the Federal Reserve System, as to matters within their respective
jurisdictions, shall have power by rules and regulations to define
technical, trade, and accounting terms used in this title insofar as
such definitions are not inconsistent with the provisions o f this title.
* * * * *
Sec. ft. (a) Any exchange may be registered with the Com m is­
sion as a national securities exchange under the terms and con­
ditions hereinafter provided in this section, by filing a registration
statement in such form as the Commission m ay prescribe, con­
taining the agreements, setting forth the information, and accom ­
panied by the documents, below specified:
(1)
An agreement (which shall not be construed as a waiver of
any constitutional right or any right to contest the validity of any
rule or regulation) to com ply, and to enforce so far as is within its




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powers com pliance by its members, with the provisions of this
title, and any amendment thereto and any rule or regulation made
or to be made thereunder; * * *
(b) N o registration shall be granted or remain in force unless
the rules o f the exchange include provision for the expulsion, sus­
pension, or disciplining o f a member for conduct or proceeding
inconsistent with just and equitable principles o f trade, and declare
that the willful violation o f any provisions o f this title or any rule
or regulation thereunder shall be considered conduct or proceeding
inconsistent with just and equitable principles o f trade.
(c) Nothing in this title shall be construed to prevent any ex­
change from adopting and enforcing any rule not inconsistent with
this title and the rules and regulations thereunder and the ap­
plicable laws o f the State in which it is located.
M ARG IN REQU IREM EN TS

Sec. 7. (a) For the purpose of preventing the excessive use of
credit for the purchase or carrying o f securities, the Board of
Governors o f the Federal Reserve System shall, prior to the
effective date o f this section and from time to time thereafter,
prescribe rules and regulations with respect to the amount of
credit that may be initially extended and subsequently maintained
on any security (other than an exempted security) registered on a
national securities exchange. For the initial extension o f credit,
such rules and regulations shall be based upon the following stand­
ard : An amount not greater than whichever is the higher o f—
(1) 55 per centum o f the current market price o f the
security, or
(2) 100 per centum o f the lowest market price o f the
security during the preceding thirty-six calendar months, but
not more than 75 per centum o f the current market price.
Such rules and regulations may make appropriate provision with
respect to the carrying of undermargined accounts for limited
periods and under specified conditions; the withdrawal o f funds or
securities; the substitution or additional purchases o f securities;
the transfer o f accounts from one lender to another; special or
different margin requirements for delayed deliveries, short sales,
arbitrage transactions, and securities to which paragraph (2) of
this subsection does not apply; the bases and the methods to be
used in calculating loans, and margins and market prices; and
similar administrative adjustments and details. For the purposes
of paragraph (2) o f this subsection, until July 1, 1936, the lowest
price at which a security has sold on or after July 1, 1933, shall be
considered as the lowest price at which such security has sold
during the preceding thirty-six calendar months.
(b ) Notwithstanding the provisions o f subsection (a) of this




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section, the Board o f Governors o f the Federal Reserve System,
may, from time to time, with respect to all or specified securities
or transactions, or classes o f securities, or classes o f transactions,
by such rules and regulations (1) prescribe such lower margin
requirements for the initial extension or maintenance o f credit as
it deems necessary or appropriate for the accom modation of
commerce and industry, having due regard to the general credit
situation of the country, and ( 2 1 prescribe such higher margin
requirements for the initial extension or maintenance o f credit
as it may deem necessary or appropriate to prevent the excessive
use of credit to finance transactions in securities.
(c) It shall be unlawful for any member o f a national securities
exchange or any broker or dealer who transacts a business in
securities through the medium o f any such member, directly or
indirectly to extend or maintain credit or arrange for the exten­
sion or maintenance o f credit to or for any customer—
(1) On any security (other than an exempted security) regis­
tered on a national securities exchange, in contravention o f the
rules and regulations which the Board o f Governors o f the Federal
Reserve System shall prescribe under subsections (a) and (b) of
this section.
(2) W ithout collateral or on any collateral other than exempted
securities a n d /or securities registered upon a national securities
exchange, except in accordance with such rules and regulations as
the Board o f Governors of the Federal Reserve System m ay pre­
scribe (A ) to permit under specified conditions and for a limited
period any such member, broker, or dealer to maintain a credit
initially extended in conform ity with the rules and regulations of
the Board o f Governors o f the Federal Reserve System, and (B )
to permit the extension or maintenance of credit in cases where
the extension or maintenance of credit is not for the purpose of
purchasing or carrying securities or of evading or circumventing
the provisions o f paragraph (1) o f this subsection.
(d) It shall be unlawful for any person not subject to subsec­
tion (c) to extend or maintain credit or to arrange for the exten­
sion or maintenance o f credit for the purpose o f purchasing or
carrying any security registered on a national securities exchange,
in contravention of such rules and regulations as the Board of
Governors o f the Federal Reserve System shall prescribe to pre­
vent the excessive use o f credit for the purchasing or carrying of
or trading in securities in circumvention o f the other provisions
o f this section. Such rules and regulations m ay impose upon all
loans made for the purpose o f purchasing or carrying securities
registered on national securities exchanges limitations similar to
those imposed upon members, brokers, or dealers by subsection
(c) o f this section and the rules and regulations thereunder. This
subsection and the rules and regulations thereunder shall not apply
(A ) to a loan made by a person not in the ordinary course of
his business, (B ) to a loan on an exempted security, (C ) to a




R E G U L A T IO N

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T

loan to a dealer to aid in the financing o f the distribution of
securities to customers not through the medium o f a national
securities exchange, (D ) to a loan by a bank on a security other
than an equity security, or (E ) to such other loans as the Board
o f Governors o f the Federal Reserve System shall, by such rules
and regulations as it may deem necessary or appropriate in the
public interest or for the protection o f investors, exempt, either
unconditionally or upon specified terms and conditions or for
stated periods, from the operation o f this subsection and the rules
and regulations thereunder.
•

•

•

«

*

Sec. 8. It shall be unlawful for any member o f a national securi­
ties exchange, or any broker or dealer who transacts a business in
securities through the medium of any such member, directly or
indirectly—
(a) T o borrow in the ordinary course of business as a broker or
dealer on any security (other than an exempted security) regis­
tered on a national securities exchange except (1) from or through
a member bank o f the Federal Reserve System, (2) from any
nonmember bank which shall have filed with the Board o f G ov­
ernors o f the Federal Reserve System an agreement, which is
still in force and which is in the form prescribed by the Board,
undertaking to com ply with all provisions o f this Act, the Fed­
eral Reserve Act, as amended, and the Banking A ct o f 1933,
which are applicable to member banks and which relate to the
use o f credit to finance transactions in securities, and with such
rules and regulations as may be prescribed pursuant to such
provisions o f law or for the purpose o f preventing evasions thereof,
or (3) in accordance with such rules and regulations as the
Board o f Governors o f the Federal Reserve System m ay pre­
scribe to permit loans between such members a n d /o r brokers
a n d /or dealers, or to permit loans to meet emergency needs.
A ny such agreement filed with the Board o f Governors o f the
Federal Reserve System shall be subject to termination at any
time by order o f the Board, after appropriate notice and oppor­
tunity for hearing, because o f any failure by such bank to
com ply with the provisions thereof or with such provisions of
law or rules or regulations; and, for any willful violation of
such agreement, such bank shall be subject to the penalties
provided for violations of rules and regulations prescribed under
this title. The provisions of sections 21 and 25 o f this title shall
apply in the case o f any such proceeding or order o f the Board of
Governors o f the Federal Reserve System in the same manner
as such provisions apply in the case o f proceedings and orders
o f the Commission.
(b) T o permit in the ordinary course of business as a broker
his aggregate indebtedness to all other persons, including cus­
tom ers’ credit balances (but excluding indebtedness secured by




R E G U L A T IO N

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exempted securities), to exceed such percentage o f the net capital
(exclusive o f fixed assets and value of exchange membership)
employed in the business, but not exceeding in any case 2,000 per
centum, as the Commission may by rules and regulations pre­
scribe as necessary or appropriate in the public interest or for the
protection o f investors.
(c) In contravention o f such rules and regulations as the C om ­
mission shall prescribe for the protection o f investors to hypoth­
ecate or arrange for the hypothecation o f any securities carried
for the account o f any customer under circumstances ( 1 1 that
will permit the commingling o f his securities without his written
consent with the securities o f any other customer, (2) that will
permit such securities to be commingled with the securities o f any
person other than a bona fide customer, or (3) that will permit
such securities to be hypothecated, or subjected to any lien or
claim o f the pledgee, for a sum in excess o f the aggregate indebted­
ness o f such customers in respect o f such securities.
(d) T o lend or arrange for the lending o f any securities carried
for the account o f any customer without the written consent of
such customer.
* * * * *
Sec. 11. (d ) It shall be unlawful for a member of a national
securities exchange who is both a dealer and a broker, or for any
person who both as a broker and a dealer transacts a business in
securities through the medium o f a member or otherwise, to effect
through the use o f any facility o f a national securities exchange
or o f the mails or o f any means or instrumentality of interstate
commerce, or otherwise in the case o f a member, (1) any trans­
action in connection with which, directly or indirectly, he extends
or maintains or arranges for the extension or maintenance o f credit
to or for a customer on any security (other than an exempted
security) which was a part o f a new issue in the distribution of
which he participated as a member o f a selling syndicate or group
within six months prior to such transaction: Provided, That credit
shall not be deemed extended by reason o f a bona fide delayed
delivery o f any such security against full payment of the entire
purchase price thereof upon such delivery within thirty-five days
after such purchase, * * *
* * * * *
Sec. 17. (b) Any broker, dealer, or other person extending
credit who is subject to the rules and regulations prescribed by the
Board o f Governors o f the Federal Reserve System pursuant to
this title shall make such reports to the Board as it may require
as necessary or appropriate to enable it to perform the functions
conferred upon it by this title. I f any such broker, dealer, or
other person shall fail to make any such report or fail to furnish
full information therein, or, i f in the judgment o f the Board it is
otherwise necessary, such broker, dealer, or other person shall




R E G U L A T IO N

23

T

permit such inspections to be made by the Board with respect to
the business operations o f such broker, dealer, or other person as
the Board may deem necessary to enable it to obtain the required
information.
*

*

*

*

*

Sec. 23. (a) The Commission and the Board o f Governors of
the Federal Reserve System shall each have power to make such
rules and regulations as may be necessary for the execution of the
functions vested in them by this title, and may for such purpose
classify issuers, securities, exchanges, and other persons or m at­
ters within their respective jurisdictions. N o provision o f this
title imposing any liability shall apply to any act done or omitted
in good faith in conform ity with any rule or regulation o f the
Commission or the Board of Governors of the Federal Reserve
System, notwithstanding that such rule or regulation may, after
such act or omission, be amended or rescinded or be determined
by judicial or other authority to be invalid for any reason.
* * * * *
Sec. 29. (a) Any condition, stipulation, or provision binding any
person to waive compliance with any provision o f this title or of
any rule or regulation thereunder, or o f any rule o f an exchange
required thereby shall be void.
(b) Every contract made in violation of any provision o f this
title or o f any rule or regulation thereunder, and every contract
(including any contract for listing a security on an exchange)
heretofore or hereafter made the performance o f which involves
the violation of, or the continuance o f any relationship or practice
in violation of, any provision o f this title or any rule or regulation
thereunder, shall be void (1) as regards the rights of any person
who, in violation o f any such provision, rule, or regulation, shall
have made or engaged in the performance o f any such contract,
and (2) as regards the rights o f any person who, not being a party
to such contract, shall have acquired any right thereunder with
actual knowledge of the facts by reason o f which the making or
performance o f such contract was in violation o f any such pro­
vision, rule or regulation: * * *
(c) N othing in this title shall be construed (1) to affect the
validity o f any loan or extension o f credit (or any extension or
renewal thereof) made or o f any lien created prior or subsequent
to the enactment o f this title, unless at the time o f the making of
such loan or extension o f credit (or extension or renewal thereof)
or the creating o f such lien, the person making such loan or exten­
sion of credit (or extension or renewal thereof) or acquiring such
lien shall have actual knowledge o f facts by reason o f which the
making o f such loan or extension o f credit (or extension or re­
newal thereof) or the acquisition of such lien is a violation of the
provisions of this title or any rule or regulation thereunder, or
(2) to afford a defense to the collection o f any debt or obligation




24

R E G U L A T IO N

T

or the enforcement of any lien by any person who shall have
acquired such debt, obligation, or lien in good faith for value and
without actual knowledge o f the violation of any provision o f this
title or any rule or regulation thereunder affecting the legality of
such debt, obligation, or lien.
Sec. 30. (a) It shall be unlawful for any broker or dealer,
directly or indirectly, to make use o f the mails or o f any means or
instrumentality of interstate commerce for the purpose o f effecting
on an exchange not within or subject to the jurisdiction o f the
United States, any transaction in any security the issuer o f which
is a resident of, or is organized under the laws of, or has its prin­
cipal place o f business in, a place within or subject to the juris­
diction o f the United States, in contravention o f such rules and
regulations as the Commission may prescribe as necessary or ap­
propriate in the public interest or for the protection o f investors
or to prevent the evasion o f this title.
(b)
The provisions o f this title or o f any rule or regulation
thereunder shall not apply to any person insofar as he transacts a
business in securities without the jurisdiction of the United States,
unless he transacts such business in contravention o f such rules
and regulations as the Commission may prescribe as necessary or
appropriate to prevent the evasion o f this title.
* * * * *
Sec. 32. (a) Any person who willfully violates any provision
o f this title, or any rule or regulation thereunder the violation of
which is made unlawful or the observance o f which is required
under the terms o f this title, or any person who willfully and know­
ingly makes, or causes to be made, any statement in any applica­
tion, report, or document required to be filed under this title or any
rule or regulation thereunder or any undertaking contained in a
registration statement as provided in subsection (d ) o f section 15
o f this title, which statement was false or misleading with respect
to any material fact, shall upon conviction be fined not more chan
$10,000, or imprisoned not more than two years, or both, except
that when such person is an exchange, a fine not exceeding $500,000
may be imposed; but no person shall be subject to imprisonment
under this section for the violation o f any rule or regulation if he
proves that he had no knowledge o f such rule or regulation.




*

*

*

*

*

Directory
O F THE

Federal Reserve Bank
of New York

Second Federal Reserve District
(January 1950)

W e suggest that you keep this directory
available fo r reference. Its regular use
w ill facilitate you r transactions with us.




D irectory
OF THE

FEDERAL RESERVE B A N K
O F N E W YORK

★

Head Office, 33 Liberty Street, New Y ork, N. Y .
M ailing A d d ress
F ed era l R eserve

N ew

P. 0 .

S ta tio n

Y o r k 45, N . Y .

Telephone R E ctor 2-5700

B uffalo Branch, 270-276 Main Street, Buffalo, N. Y .




M ailing A d d ress
B u ffa lo

5, N. Y.

Telephone W A shington 7562

FEDERAL RESERVE BANK
OF NEW YORK

January 31, 1950.

T o Banks and Trust Companies in the
Second Federal Reserve D istrict:

This is the third edition o f the directory o f this Bank, superseding
the directory sent you in May 1948. W hile the substance o f the earlier
directories has been retained in the present edition, we feel that we
have increased the utility o f the directory to you by (1 ) producing
it in smaller, more compact, fo r m ; (2 ) grouping the operations o f each
departm ent o f interest to you under the various divisions o f the
departments, which are listed with the names o f their ch iefs; and (3 )
adding an index. W e plan to issue further editions o f the directory
from time to time, as appropriate. Changes in the titles o f our officers,
which occur between issues, w ill be described in our circulars showing
changes in authorized signatures.
This directory should be o f assistance to you in communicating
with the officers o f this Bank and the departments and divisions under
their supervision; its regular use will enable you to obtain speedier
and more effective service from us. W e suggest that you keep it con­
venient fo r that purpose.
A dditional copies o f this directory may be obtained upon request.




A llan

S proul,

President.

CONTENTS
Page

Head Office functions, departments, divisions and principal
operations, and persons in charge
Accounting, Planning, B uilding Operating and Service.

.

5

A u d i t ................................................................................................. 6
Bank Supervision and Bank R e la t i o n s ....................................... 6
Cash and C o lle c t io n s ........................................................................7
F o r e i g n ................................................................................................. 9
Government Bond, Safekeeping and R. F . C. Custody .

.

.

10

L e g a l ................................................................................... 11
Loans and C r e d i t s .............................................................................. 12
Open Market Operations, Treasury Issues, and Margin
R e g u l a t i o n s .....................................................................................12
P e r s o n n e l ...........................................................................................13
Research and S t a t i s t i c a l ................................................................. 14
Secretary’s O f f i c e ..............................................................................1-t
Buffalo Branch functions, divisions and principal operations,
and persons in c h a r g e .............................................................................. 15
D i r e c t o r s .......................................................................
Member o f Federal A dvisory Council

.

.

. . .

.1 7

.................................19

Industrial Advisory C o m m itte e ................................................................. 19
Buffalo Branch Directors . . .

..........................

.

.

.

I n d e x ..............................................................................................................20




19




(T h e lettered Regulations referred to in this
directory are Regulations o f the B oard of
Governors o f the Federal Reserve System)

Federal Reserve Bank of N ew York
★
PRESID EN T
A

llan

S proul

FIR ST VICE PRESIDEN T
L

e s l ie

R. R

ounds

★

HEAD OFFICE
AC C O U N TIN G , P L A N N IN G , B U IL D IN G O P E R A T IN G A N D S E R V IC E
H erbert H . K

im b a l l ,

V ice President

A c c o u n t i n g D e p a r t m e n t , P e te r P. Lang,

Manager

H a r o ld M . W e s s e l , M anager
A c c o u n t i n g D i v i s i o n , H a r v e y C. D r e w ,

Chief

Accounts, deposits in, except foreign accounts
Deposits o f Federal taxes
Member bank reserve accounts
Nonmember bank clearing accounts
Regulation D — Reserves o f member banks
Treasurer’s account, United States
P l a n n i n g D e p a r t m e n t , Jam es J . C a r r o l l ,

Manager

Chief

P l a n n i n g D i v i s i o n , F r e d e r ic k L . S m e d le y ,

Planning
P u r c h a s i n g D i v i s i o n , W i l l l i a m C. M o rg a n ,

Purchasing A gen t

Purchase o f supplies
B u il d in g O p e r a t in g , O tto

\V. T e n E y c k , Assistant V ice President

H erbert A . M u e t h e r , Superintendent
S e r v ic e D e p a r t m e n t , O tto W . T en E y ck ,

Assistant V ice President

R a l p h W . S ch e ff e r , Manager
P o s t O f f ic e D iv is io n , R a p h a e l

A . d eL eon , Chief

Federal Reserve P. 0 . Station
Mail, incom ing and outgoing
P r o t e c t i o n D i v i s i o n , G eo rge H . T u sv e ld ,

Chief

Protection, fire and safety
T e l e p h o n e S e c t i o n , M rs. M ild re d C arew ,

Telephone service




5

C h ief Operator

DIRECTORY

6

A U D IT
W
A

u d it in g

D

il l ia m

epartment,

H . D il l is t in , General A u ditor

C ur tis R . B o w m a n , Assistant General A uditor

A uditing D iv isio n , M ic h a e l A . C r osby , C hief

Inform ation reflected on the bank’s records furnished to bank examiners and
others
R econciliation o f accounts o f member banks and others

B A N K S U P E R V IS IO N A N D B A N K R E L A T IO N S
R eg in al d B . W
Ba

n k

E x a m in a t io n s D

il t se ,

epartm ent,

W

V ice President
il l ia m

F . S h e e h a n , Chief E xam iner

A n a l y s is D iv isio n , F rederick J. A l e x a n d e r , Chief

Analysis o f reports o f examination
Regulations, administration o f
L Interlocking bank directorates under the Clayton A ct
0 Loans to executive officers o f member banks
R Relationships with dealers in securities under section 32 o f the Banking
A ct o f 1933
A

pplicatio n and

R ecords D iv isio n , J ere V . D. S t r y k e r , Chief

Branches, applications for
Condition reports, State member banks
Earnings and dividends reports, State member banks
Regulations, administration o f
C Acceptance by member banks o f drafts or bills o f exchange
F Trust powers o f national banks
H Membership o f State banking institutions in the Federal Reserve System
1 Increase or decrease o f capital stock o f Federal Reserve Banks and can­
cellation o f old and issue o f new stock certificates
K Banking corporations authorized to do foreign banking business under
the terms o f section 2 5 (a ) o f the Federal Reserve A ct
M Foreign branches o f national banks and o f corporations organized under
the provisions o f section 2 5 (a ) o f the Federal Reserve A ct
P H olding com pany affiliates— voting permits
Q Paym ent o f interest on deposits
E x a m in in g D iv isio n , Under direct supervision o f Chief Exam iner

Exam ination o f State member banks and affiliates




FEDERAL RESERVE BANK OF NEW YORK

7

R e l a t i o n s D e p a r t m e n t , H o w a rd D . C rosse, Manager
( Special R epresentatives: G. M o rga n B r o w n e , Jam es H . B u c h a n , L a u r e n c e E .
D ig n a n , P a r k e R. E lm e r , J o h n B. G r a n t , A . H e r b e r t G ra u e, W a l t e r E.
V a n der W a a g , A . C h e s t e r W a l t o n )

B a n k

A pplications fo r membership in Federal Reserve System
Bank relations activities
Visitors at Federal Reserve Bank
Visits to district banks

C A S H A N D C O LL E C T IO N S
V a l e n t in e W

il l is ,

V ice President

D onald J. C a m e r o n , Assistant V ice President
F e l ix T. D avis , Assistant V ice President

Cash D e p a r t m e n t, Paul

R. F i t c h e n , Manager

C o in a n d B u l l io n D iv is io n , W illia m

J. L eo n a rd , Chief

Counting, verifyin g and w rapping o f coin
Exchange o f uncurrent United States coin presented fo r redemption
Paym ent o f coin
R eceipt o f coin
Segregation o f unfit, uncurrent, foreign and counterfeit coin
P a y i n g D i v i s i o n , P e t e r P . M a lc o lm ,

Chief

Allotm ent o f new currency to banks
Certification o f checks drawn on this bank
Payment o f currency

R e c e iv in g D iv is io n , F r a n k

M.

W a k e ma n ,

Chief

Receipt, fo r immediate credit, o f Government checks and checks on member
banks’ reserve accounts drawn fo r amounts o f $1,000 and over
R eceipt o f currency
S o r t i n g a n d C o u n t i n g D i v i s i o n , C h a r le s F . B e is le r ,

Chief

Sorting o f currency fo r fitness, kind and genuineness
Verification by piece count o f all deposits o f paper currency




DIRECTORY

8

C h e c k R o u t in g S y m b o l

an d

T r easu r y C u r r en cy R eport S ectio n ,
C ar l S tr o m , Supervisor

Check R outing Sym bol Program
Reports o f unusual currency transactions on Form TC R -1 pursuant to instruc­
tions from the Treasury Department

C a s h C u s t o d y D e p a r t m e n t , M ic h a e l J. M cL a u g h l in , Manager
C a s h C u st o d y D iv isio n , J o h n H e e m s a t h , C hief

(See Cash Department)

Check D

epartm ent,

Roy E . W

endell,

Manager

Adjustm ents relative to the presentment and collection o f checks
C ity and County clearing arrangements, exchanges between participants in
D irect routing o f checks and other cash items to Federal Reserve Banks and
branches b y member and nonmember clearing banks through the Consoli­
dated A ir Transportation Program or other methods
Regulation J— Check clearing and collection
C learings D iv isio n , C h a r l e s E . D ir inger , C h ief

Cheeks and other cash items collectible through
New Y ork Clearing House Association
N orthern New Jersey Clearing House Association, and
Manhattan, B ron x and B rooklyn collection arrangement
Remittance payments fo r Second D istrict cash letters
R eturn Items
T r an sit D ivision , J o h n C . L e n z , C hief

Checks and other cash items (except Government checks), collection of, pay­
able in Second Federal Reserve D istrict and other Federal Reserve districts

C o l l e c t i o n D e p a r t m e n t , F r a n k l in E . P et e r so n , Manager
C o u n t r y C o l lec tio n D ivisio n , W

alter

R . N oe , C hief

Collection o f notes, drafts and other noncash items
Reclamation o f United States Government checks
Regulation G— Collection o f noncash items
C o u p o n C o l l e c t io n D iv isio n , R obert J. S t e p h e n s , C hief

Collection o f corporate bonds and coupons payable in the continental United
States
Paym ent o f coupons o f the United States Government, Governmental agencies
and the International Bank fo r Reconstruction and Development
Regulation G— Collection o f noncash items




FEDERAL RESERVE BANK OF NEW YORK

W i r e T r a n s f e r D i v i s i o n , O t t o S u se n ,

9

C hief

City clearing arrangement o f banks outside New Y ork City, settlements o f
balances due to and due from participants in
Mail transfers o f funds
Signature authorities
Telegrams
Coding, decoding and authenticating by testword of, involving payments o f
funds or deliveries o f securities
Receipt and transmittal o f
Testwords for, furnishing o f
Telegraphic transfers o f funds
G

overnm ent

Check D

epartm ent,

M ic h a e l J. M cL a u g h l in , Manager

G o v e r n m e n t C h e c k D iv isio n , H ar r y T a p p e n , C hief

Government checks, payment or collection of

F O R E IG N
L . "W er n er K n o k e , V ice President
N o r m a n P . D a v is , Assistant V ice President
H orace L . S anford , Assistant V ice President
F o r e ig n D

epartm ent,

W

alter

H . R ozell , Jr., Manager

C ab l e D iv isio n , N ic h o l a s A b e l , Chief

Cablegrams, radiograms, and telegrams relating to foreign business, sending,
receiving, coding, decoding, testing and otherwise processing o f
F o r e i g n O p e r a t i o n s D i v i s i o n , B e r tr a n d H . W e b b e r ,

C hief

Federal Reserve System accounts maintained abroad, operation of
Foreign central bank and government dollar, gold and security custody
accounts, operation of
Foreign exchange
Rates, certification of, under Tariff A ct o f 1930
Transactions
United States Treasury and foreign depositors, on behalf o f
G old Reserve A ct o f 1934
A pplications, licenses, inquiries, purchases and sales thereunder as fiscal agent
International Bank fo r Reconstruction and Development accounts, operation of
International M onetary F u n d accounts, operation of
Silver Purchase A ct o f 1934, purchases thereunder as fiscal agent
United States Stabilization Fund, operations of, as fiscal agent




10

DIRECTORY

G O V E R N M E N T B ON D, S A F E K E E P IN G A N D R .F .C . C U S T O D Y
A r t h u r P h e l a n , V ice President
W

il l ia m

F . T reiber , Assistant V ice President

G o v e r n m e n t B o n d D e p a r t m e n t , C h a r le s
G o v e r n m e n t B o n d D iv is io n , W a l t o n B ru sh ,

N. V a n H o u te n , Manager
C hief

United States Treasury Bills, Certificates o f Indebtedness, N otes, Bonds and
Savings Notes
Denominational exchange
Exchanges o f bearer fo r registered bonds
Exchanges o f registered for bearer bonds
Exchange subscriptions
Form s fo r subscriptions, exchanges, transfers, etc.
Lost, stolen, destroyed or mutilated securities
Paym ent or redemption
R eceipt o f delivery instructions and o f paym ent regarding cash subscriptions
Telegraphic transfer o f bearer securities from New Y ork to certain other
cities
Transfer o f registered bonds
Various Securities o f the Philippine Governm ent, the P u erto Rican Government
and A gen cies o f the United States Governm ent
Certain transactions in connection with issuance, exchange and redemption
Bonds o f International Bank f o r Reconstruction and D evelopm ent
Certain transactions in connection with issuance, exchange and redemption
Treasury Tax and Loan A ccounts
R ecord o f accounts
Record o f collateral

R . F.

C . C u s t o d y D e p a r t m e n t , C h a r le s

R . F.

C . C u s t o d y D i v i s i o n , J o sep h

N. V a n H o u t e n , Manager

M. O ’B r ie n , C hief

Disbursements fo r Reconstruction Finance Corporation and Commodity Credit
Corporation b y checks on U. S. Treasurer
D rafts paid fo r Com m odity Credit Corporation
Loans by Reconstruction Finance Corporation, servicing o f certain
Receipts and payments for
Com m odity Credit Corporation
Reconstruction Finance Corporation
U. S. Commercial Company




FEDERAL RESERVE BANK OF NEW YORK

S a v i n g s B o n d D e p a r t m e n t , W e s le y W . B u rt,

11

M anager

I ssu e D iv isio n , P e m b e r t o n A . H arris , C hief

A ccounts o f issuing agents
Consignment o f unissued Series E bonds
Lost, stolen, mutilated or destroyed bonds
Sales o f bonds o f Series E, F and G
Safekeeping o f savings bonds for owners
R e d e m p t io n D iv isio n , B u r t h a l A . R o eb u c k , Chief

A ccounts o f paying agents
A rm ed Forces Leave Bonds, redemption of
Reissues and corrections
Savings Bonds, redemption of
S a f e k e e p i n g D e p a r t m e n t , H a r r y M . B oyd,

Manager

S a fek eep in g D iv isio n , Jam es H . B a k e r , C hief

D elivery o f bearer Government securities pursuant to telegraphic transfer from
other Federal Reserve Banks
D elivery o f Government securities on original issue over the counter, or by
mail, or by telegraphic transfer to other Federal Reserve Districts
D elivery over the counter, or by mail, o f bearer securities o f International
Bank fo r Reconstruction and Development and various Government agencies
R eceipt and delivery o f securities purchased or sold fo r account o f member
banks
Safekeeping o f securities fo r account o f member banks
S e c u r i t y C u s t o d y D e p a r t m e n t , W illia m

S ec u r it y C u st o d y D iv isio n , W

il l ia m

F . A b ra h a m s, Manager

E . V a l e n t in e , Chief

(See Safekeeping Department)

LEGAL
W

alter

S. L o gan , V ice President and General Counsel

T odd G. T ieb o ut , A ssistant General Counsel
R u f u s J. T r im bl e , Assistant General Counsel
R obert H . B ro m e , A ssistant Counsel
J o h n J . C l a r k e , A ssistant Counsel




DIRECTORY

12

L O A N S AN D C R E D IT S
A r t h u r P h e l a n , V ice President
C r e d it D e p a r t m e n t , W a l t e r C. W a r n e r ,
C r e d it D i v i s i o n , H a r r y

Manager

F . C om erfo rd , Chief

C redit data, collection and analysis o f
Farm Credit F ile and relative forms, distribution of
Financial statement form s, distribution of
Regulation A — Discounts for and advances to member banks
A cceptability o f paper offered fo r discount or as collateral to advances
Regulation S— Industrial loans
Processing o f applications
Servicing o f loans or commitments made
D is c o u n t D e p a r t m e n t ,

W a l t e r C. W a r n e r , Manager

D i s c o u n t D i v i s i o n , P h ilip

M. S ch m id t, Chief

Regulation A — Discounts fo r and advances to member banks
E ligibility o f paper offered fo r discount or as collateral to advances
Processing o f applications
Servicing o f discounts and advances
Regulation S— Industrial loans
Servicing o f loans and collateral

OPEN M A R K E T O P E R A T IO N S , T R E A S U R Y ISS U E S,
A N D M A R G IN R E G U L A T IO N S
R obert G. R ouse , V ice President

Assistant V ice President
Assistant V ice President
S. M a r s h , J r., Manager

S e c u r i t i e s D e p a r t m e n t , S ila s A . M i l l e r ,

John H. W
S pen cer
B il l D iv is io n , W i lli a m

urts,

A . K e e p e rs, Bill B u yer

F r a n k l i n S. D e u e l, C h ief

Acceptance by member banks o f drafts or bills o f exchange, inquiries regarding
B ankers’ acceptances, open market purchases and sales o f
Bills o f exchange and trade acceptances, open market purchases of
R egu lation s:
B Open Market purchases o f bills o f exchange, trade acceptances and
bankers’ acceptances under section 14 o f the Federal Reserve A ct
C A cceptance by member banks o f drafts or bills o f exchange




13

FEDERAL RESERVE BANK OF NEW YORK

S e c u r i t i e s D i v i s i o n , R o la n d

H . B e h r e n s , C hief

Capital stock o f Federal Reserve Bank, registration, issuance and cancellation o f
Dividends on Federal Reserve Bank stock
Federal Open Market Committee, regulation relating to open market operations
o f Federal Reserve Banks
Government securities (other than Savings B onds and N otes), cash subscrip­
tions and tenders to new
Government securities, purchases and sales for account o f member banks
Open market operations in United States Government securities
Regulation E , Purchase o f W arrants
W arrants, purchase o f
*

m

*

*

M argin Regulations, N o r m a n P. D avis , Assistant V ice President
F r a n k l in S. D e u e l , C hief, B ill Division
Regulations, administration of
T Extension and maintenance o f credit b y brokers, dealers, and members
o f national securities exchanges
U Loans by banks fo r the purpose o f purchasing or carrying stocks regis­
tered on a national securities exchange

PE R SO N N E L
H arold A . B il b y , V ice President
M a r cus A . H arris , Assistant V ice President
P e r s o n n e l D e p a r t m e n t , W i ll i a m A . H e i n l ,
M e d i c a l D i v i s i o n , D r . A d e la id e R om aine,

Manager

Medical D irector

P e r s o n n e l C l a s s if ic a t io n a n d P a y r o l l D iv is io n , A n d re w

M.

R am sey,

C h ief

Job analysis and evaluation
Personnel records
W age and salary surveys
P e r s o n n e l D i v i s i o n , J o h n J. F le m in g ,

Chief

E m ployee assignment, education, training
Employm ent
S o cial

and

R ecr eatio n al A d m in ist r a t io n , F . S an fo rd M c C a r t h y , Jr.,




D irector, E m ployees’ Activities

14

DIRECTORY

R E S E A R C H A N D S T A T IS T IC A L
H arold V . R oelse , V ice President
R e s e a r c h D e p a r t m e n t , 0 . E r n e s t M oore,

B alance

of

M anager

P a y m e n t s D iv isio n , A r t h u r I. B lo o m field , Chief

Collection and analysis o f data on United States balance o f payments
F oreign exchange reports on United
M onetary F u nd forms

States Treasury and International

D o m estic R e sear ch D iv isio n , G eorge G a r v y , Chief

Collection and analysis o f data on money market and United States Govern­
ment finance
Collection and analysis o f data on U nited States economic conditions
D epartm ent store reports
F in a n c ia l S tatistics D iv isio n , A lfred I n g e , C hief

Current and special tabulations and analyses o f domestic banking and other
financial statistics
F oreign R esear ch D iv isio n , H e n r y C. W

a l l ic h ,

C hief

Collection and analysis o f data on foreign m onetary and economic conditions
R eference L ibrary , M arguerite B u r n e t t , C hief

Collection, classification, and circulation o f periodicals and publications
Preparation o f daily Newspaper Review

S E C R E T A R Y ’ S O F F IC E
J o h n J. C l a r k e , Secretary
J a m e s J. C arroll , Assistant Secretary

C orporate secretarial functions
P ublic inform ation activities
P ress

and

C irculars D iv isio n , A lfred J. H u d so n , Chief

Circulars and Federal Reserve publications




FEDERAL RESERVE BANK OF NEW YORK

15

B U F FA LO B R A N C H
general

I

n sley

m anager

B . S m it h

C A S H , C H E C K A N D C O LL E C T IO N
H a l s e y W . S n o w , Cashier
C a s h D iv isio n , R obert R . C overt , C hief

R eceipt and payment o f currency and coin
Signature authorities
Sorting and counting o f currency and coin
Telegraphic and mail transfers o f funds
C h e c k D ivisio n , M ilford A . G rote , C hief

Collection o f checks payable in Second Federal Reserve D istrict and other
Federal Reserve Districts
Collection o f Government checks
Return items
C o l le c t io n D iv isio n , J. F r a n k l in T h o m a s , Jr., Chief

Collection o f corporate bonds and coupons and paym ent o f United States
Government coupons
Collection o f notes, drafts, and other noncash items
Reclamation o f United States Government checks

A C C O U N TIN G , C R E D IT A N D D ISC O U N T, O F F IC E
S E R V IC E A N D S E C U R IT IE S
G eorge J. D oll , A ssistant Cashier
A c c o u n tin g D iv isio n , K e n n e t h P. M ead , C hief

Nonmember bank clearing accounts
Remittances fo r cash letters
Reserve accounts o f member banks
Reserve requirements o f member banks
C redit

and

D isc o u n t D iv isio n , G erald H . G r e e n e , C hief

Condition reports and earnings and dividends reports o f State member banks
Discounts fo r and advances to member banks
Financial statement form s and Farm Credit File




16

DIRECTORY

O ffice S ervice D iv isio n , H arrison E. M a r t in , Chief

E m ployees’ records
Em ploym ent
Job analysis and evaluation
Purchasing
S ecurities D ivisio n , F r a n k H end er so n , Chief

Paym ent or redemption o f United States Government securities
Safekeeping o f securities fo r account o f member banks
Sales o f Savings Bonds o f Series E , F , and G, and Savings Notes

B A N K R E L A T IO N S
M . M onroe M eyer s , Assistant Cashier

Bank and public relations activities
V isitors at Buffalo Branch
Visits to banks

G e n er al A c c o u n t a n t , H erbert W . W

eber

Adjustm ents affecting accounts
Reconciliation o f member bank and other accounts
Statements o f accounts and other inform ation furnished to bank examiners
and others




Federal Reserve Bank of N ew York
D IR E C TO R S

R obert T . S te v e n s,

Chairman o f the Board, J. P. Stevens & Co., Inc., New York, N. Y.
Chairman, and Federal Reserve A g en t

W

il l ia m

I. M

yers,

Dean, New York State College o f Agriculture, Cornell University, Ithaca, N. Y.
Deputy Chairman

L

e w is

H. B

row n,

B. P r e s c o t t ,
President, The Keeseville National Bank,
Keeseville, N. Y.

R oger

Chairman o f the Board,
Johns-Manville Corporation,
New York, N. Y.

J a y E . Cr a n e ,

C. T r a p h a g e n ,
Chairman o f the Board,
Bank o f New York and Fifth Avenue Bank,
New York, N. Y.

John

Director,
Standard Oil Company (New Jersey),
New York, N. Y.

M

a r io n

B. F

olsom ,

F r e d e r ic E . W

Treasurer and Director,
Eastman Kodak Company,
Rochester, N. Y.




orden,

Chairman o f the Board, and President,
The National Bank o f Auburn,
Auburn, N. Y.

17

OFFICERS
A l l a n S p r o u l,
L e s lie E . R ou n d s,

President
J o h n H . W illia m s ,

First Vice President

Vice President
Vice President
R o b e r t G. R o u s e , Vice President
V a l e n t i n e W i l l i s , Vice President
R e g i n a l d B . W i l t s e , Vice President
A r t h u r P h e la n ,

Vice President
Vice President
L . W e r n e r K n o k e , Vice President
W a l t e r S . L o g a n , Vice President and
General Counsel
H a r o ld A . B ilb y ,

H a r o ld Y . R o e ls e ,

H e r b e r t H . K im b a ll,

Assistant General Counsel

T od d G . T ie b o u t,

D o n a ld J . C am eron ,

R u f u s J . T r im b le ,

Assistant Vice President

N o r m a n P . D a v is ,

O tto W . T en E yck ,

Assistant Vice President

J oh n H . W u rts,

Manager, Security

W illia m F . A b ra h a m s,

Manager, Cash
Custody Department, and Manager, Govern­
ment Check Department

Manager, Safekeeping

Department

O. E r n e s t M o ore ,

Manager, Research

Department

R o b e r t H . B rom e,

Assistant Counsel

W e s le y W . B u rt,

Manager, Savings Bond

F r a n k lin E . P e te rs o n ,

Department

Manager, Collection

Department

Manager, Planning
Department, and Assistant Secretary

Jam es J . C a r r o ll,
J o h n J . C la r k e ,

W a l t e r H . R o z e l l , J r .,

Secretary, and Assistant

H ow a rd D . C rosse,

Manager, Foreign

Department
R a lp h W . S c h e ffe r ,

Counsel

Manager, Service

Department

Manager, Bank delations

N . V a n H o u t e n , Manager, Govern­
ment Bond Department, and Manager, B.F.C.
Custody Department

Department

C h a r le s

P a u l R . F itc h e n ,

Manager, Cash Department

W illia m A . H e in l,

Manager, Personnel

C . W a r n e r , Manager, Credit Depart­
ment, and Manager, Discount Department

W a lte r

Department
P eter P. Lang,

Assistant Vice President

Assistant Vice President

M ic h a e l J . M c L a u g h lin ,

Custody Department
H a rry M . B oyd,

Chief Examiner

Assistant Vice President

W illia m F . T r e ib e r ,

Assistant Vice President

S ila s A . M ille r ,

Assistant Vice President

W illia m F . S h e e h a n ,

Assistant Vice President

M a r c u s A . H a r r is ,

Assistant General Counsel

H o r a c e L . S a n fo r d ,

Assistant Vice President

F e l i x T . D a v is ,

Economic Adviser

Manager, Accounting
R oy E . W e n d e ll,

Department
S p e n c e r S . M a r s h , J r .,

Manager, Securities

H a r o ld M . W e s s e l,

Department




Manager, Check Department
Manager, Accounting

Department

W illia m

H . D illis tin ,

C u r tis R . B o w m a n ,

General Auditor

Assistant General Auditor

18

Federal Reserve Bank of N ew York
M E M B E R OF FE D E R A L A D V IS O R Y COUNCIL
N. B

J

axter

ackson,

Chairman o f the Board o f Directors, Chemical Bank & Trust Company,
New York, N. Y .

IN D U ST R IA L A D V IS O R Y C O M M ITTEE
W i l l i a m H . P o u c h , Chairman
President, Concrete Steel Company,
New York, N. Y.

Vice Chairman
President, A. G. Nelson Paper Company, Inc.,
New York, N. Y.

A r t h u r G. N e ls o n ,

E d w a r d J . N o b le ,

Chairman o f the Board,
American Broadcasting Company, Inc.
New York, N. Y.

Buffalo Branch of Federal Reserve Bank
of N e w York
DIRECTORS
Chairman
President, Taylor Instrument Companies,
Rochester, N . Y .
L e w is B . S w ift ,

G eorge F . B

a te s,

G eorge G. K

President, Power City Trust Company,
Niagara Falls, N. Y.
Cl y d e C. B r o w n ,

F. W e n d t ,
President, Buffalo Forge Company,
Buffalo, N. Y.

E dgar

President, The Cuba National Bank,
Cuba, N. Y.
B

ernard

E. F

l e in d in s t ,

President, Liberty Bank o f Buffalo,
Buffalo, N. Y.

in u c a n e ,

President, Security Trust Company
o f Rochester,
Rochester, N. Y.

Ca r l G . W

ooster,

Farmer,
Union Hill, N. Y.

OFFICERS
I n s le y

B.

S m ith ,

General Manager
G eorge

H a ls e y W . S n o w ,

J.

D o ll,

Assistant Cashier

M . M on roe M y ers,




19

Assistant Cashier

Cashier

INDEX
Page

Acceptance by member banks o f drafts
or bills o f exchange, inquiries re­
garding ................................................
Accounts, deposits in, except foreign
accounts ................................................
Advances to member banks.....................
Armed Forces Leave Bonds, redemp­
tion o f ....................................................
Bank relations activities.........................
Bankers’ and trade acceptances and
bills o f exchange, open market pur­
chases and sales o f .............................

Page
Checks and other cash items, collection
of

12

Checks drawn on this bank, certification
o f ............................................................
Checks on member banks’ reserve ac­
counts for $1,000 and over, receipt
of, for immediate credit.....................
Check Routing Symbol Program ...........
Circulars and Federal Reserve publica­
tions ......................................................
City clearing arrangement o f banks
outside New York City, settlements
o f balances due to and due from
participants in ....................................
Commodity Credit Corporation.............
Coin, receipt and payment o f .................
Condition reports, State member banks
Coupons o f the United States Govern­
ment, Governmental agencies and the
International Bank for Reconstruc­
tion and Development, payment o f . .
Credit data, collection and analysis o f
Currency, receipt and payment o f ........
Delivery o f bearer Government securi­
ties pursuant to telegraphic transfer
from other Federal Reserve B a n k s..
Delivery o f Government securities on
original issue over the counter, or by
mail, or by telegraphic transfer to
other Federal Reserve Districts. . . .
Delivery over the counter, or by mail,
o f bearer securities o f International
Bank for Reconstruction and Devel­
opment and various Government
agencies ................................................
Discounts for member banks.................
Earnings and dividends reports, State
member b a n k s ......................................
Examination o f State member banks
and affiliates ........................................
Farm Credit File and relative forms,
distribution o f ......................................
Federal Open Market Committee, regu­
lation relating to open market opera­
tions o f Federal Reserve Banks........
Federal Reserve Bank stock...................
Federal Reserve P. O. Station...............
Federal Reserve System accounts main­
tained abroad, operation o f ...............
Federal taxes, deposits o f .....................
Financial statement forms, distribution
o f .............................................................

5
12
11
7

12

Buffalo Branch operations
Adjustments affecting accounts........ ...16
Advances to member banks
15
Bank and public relations activities 16
Coin, receipt and payment o f ................ 15
Checks, collection o f ............................. ...15
Condition reports and earnings and
dividend reports o f State member
b a n k s.................................................. ... 15
Currency, receipt and payment o f . . . 15
Discounts for member banks
15
Financial statement forms and Farm
Credit F i l e ........................................... 15
Government checks, collection and re­
clamation o f ......................................... 15
Noncash items, collection o f .................. 15
Nonmember bank clearing accounts. 15
Personnel m a tters............................... ... 16
P u rch a sin g............................................ ... 16
Reconciliation o f member bank and
other a cco u n ts................................. ... 16
Remittances for cash letters
15
Reserve accounts and reserve require­
ments o f member b a n k s .................... 15
Return it e m s ........................................... 15
Safekeeping o f securities for account
o f member b a n k s............................. ... 16
Savings b o n d s ......................................... 16
Signature au th orities......................... ...15
Statements o f accounts and other in­
formation furnished to bank ex­
aminers and others........................... 16
Transfers o f funds, mail and tele­
graphic .............................................. 15
United States Government securities 16
Visitors at Buffalo Branch................. 16
Visits to b a n k s...................................... 16




20

7

7

8
14

9
10
7

6

8
12
7

11

11

11
12
6
6
12

13
13
5
9
5
12

INDEX
Page

Foreign business, wires relating t o . . . .
9
Foreign central bank and government
dollar, gold and security custody
accounts, operation o f .........................
9
Foreign exchange rates, certification
9
of, under Tariff A ct o f 1930.............
Foreign exchange reports on United
States Treasury and International
Monetary Fund form s....................... 14
Foreign exchange transactions on be­
half o f United States Treasury and
9
foreign depositors...............................
Gold Reserve A ct o f 1934, applications,
licenses, inquiries, purchases and
sales thereunder as fiscal agent........
9
Government checks for $1,000 and over,
receipt of, for immediate credit___
7
Government checks, payment or collec­
tion o f ....................................................
9
Government checks, reclamation o f . . . .
8
Government securities (other than Sav­
ings Bonds and N otes), cash sub­
scriptions and tenders to new........... 13
Government securities, purchases and
sales for account o f member banks.. 13
Industrial lo a n s ........................................ 12
Information reflected on the bank’s
records furnished to bank examiners
and oth ers..............................................
6
International Bank for Reconstruction
and Development accounts, operation
9
o f ............................................................
International Bank for Reconstruction
and Development bonds....................... 10
International Monetary Fund accounts,
operation o f ..........................................
9
Mail, incoming and outgoing.................
5
Margin regulations, administration o f. 13
Member bank reserve accounts...............
5
Noncash items, collection o f .................
8
Nonmember bank clearing accounts.. .
5
Membership in Federal Reserve System,
application f o r ......................................
7
Newspaper Review, preparation of
daily ......................................................
14
Open market operations in United
States Government securities............. 13
Periodicals and publications, collection,
classification, and circulation o f . . . .
14
Personnel m a tters...................................
13
P la n n in g ....................................................
5
Public information activities..............
14
Purchase o f supplies...............................
5
Reconciliation o f accounts o f member
banks and others.................................
6
Reconstruction Finance Corporation.. . 10




21
P age

Regulation A— Discounts for and ad­
vances to member banks..................... 12
Regulation B— Open market purchases
o f bills o f exchange, trade accept­
ances and bankers ’ acceptances
under section 14 o f the Federal
Reserve A c t .......................................... 12
Regulation C— Acceptance by member
banks o f drafts or bills o f exchange. 6,12
Regulation D— Reserves o f member
ba n k s......................................................
5
Regulation E— Purchase o f Warrants. 13
Regulation F— Trust powers o f nation­
al b a n k s ................................................
6
Regulation G— Collection o f noncash
items ......................................................
8
Regulation H— Membership o f State
banking institutions in the Federal
Reserve S y s te m ...................................
6
Regulation I— Increase or decrease o f
capital stock o f Federal Reserve
Banks and cancellation o f old and
issue o f new stock certificates...........
6
Regulation J— Check clearing and col­
lection ....................................................
8
Regulation K — Banking corporations
authorized to do foreign banking
business under the terms o f section
25 (a ) o f the Federal Reserve A c t . .
6
Regulation L— Interlocking bank direc­
torates under the Clayton A c t...........
6
Regulation M— Foreign branches o f
national banks and o f corporations
organized under the provisions o f
section 25 (a ) o f the Federal Re­
serve A ct ..............................................
6
Regulation O— Loans to executive offi­
6
cers o f member banks.........................
Regulation P— Holding company affili­
ates— voting perm its...........................
6
Regulation Q— Payment o f interest on
d ep osits..................................................
6
Regulation R— Relationships with deal­
ers in securities under section 32 o f
the Banking A ct o f 1933...................
6
Regulation S— Industrial Loans........... 12
Regulation T— Extension and mainte­
nance o f credit by brokers, dealers,
and members o f national securities
exch an ges.............................................. 13
Regulation U— Loans by banks for the
purpose o f purchasing or carrying
stocks registered on a national se­
curities exchange ...............................
13
Remittance payments for Second Dis­
trict cash le t te r s .................................
8
Reports o f bank examinations...............
6

22

INDEX
Page

Reports o f unusual currency transac­
tions on Form TCR-1 pursuant to
instructions from the Treasury De­
partment ................................................
Research and statistical.........................
Reserve accounts o f member banks. . .
Return it e m s ............................................
Safekeeping o f securities for account
o f member banks.................................
Savings bonds ..........................................
Secretarial, corporate, functions........
Securities o f the Philippine govern­
ment, the Puerto Rican government
and agencies o f the United States
Government ..........................................
Securities purchased or sold for ac­
count o f member banks, receipt and
delivery o f ............................................
Signature au th orities.............................




7
14
5
8
11
11
14

10

11
9

Page

Silver Purchase A ct o f 1934, purchases
thereunder as fiscal agent...................

9

Telegram s..................................................

9

Telephone s e r v ice ....................................

5

Transfers o f funds, mail and tele­
graphic ..................................................
Treasurer’s account, United States. . .
Treasury Tax and Loan Accounts-----

9
5
10

United States Commercial Com pany.. .
United States Stabilization Fund,
operations of, as fiseal agent............
United States Treasury bills, certifi­
cates o f indebtedness, notes, bonds
and savings notes.................................

10
9

10

Visits to district banks...........................

7

Visitors at Federal Reserve Bank........
Warrants, purchase o f .............................

7
13