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M IS C L.

14.

20M-70125

FEDERAL RESERVE BANK
OF DALLAS

Circular No# 40#

September 2 0 , 19X6*

PROMISSORY NOTES

TO THE MEMBER BANK ADDRESSED:
On September 8 th th e P resid en t sig n e d th e b i l l e n t i t l e d , “An Act to
Amend c e r t a in s e c tio n s o f th e Act e n t i t l e d f e d e r a l R eserve Act 9* ..approved
December 2 3 , 1 9 1 3 ,“ and i t i s th e r e fo r e now a law#

A p a rt o f t h i s Act reads as f o ll o w s :
“Any Federal r e s e r v e bank: may make advances to i t s member
banks on t h e i r p rom issory notes fo r a p e r io d not exceeding f i f t e e n
days at r a t e s t o be e s t a b lis h e d by such Federal re se r v e banks,
s u b je c t t o th e review and determ in ation o f the Federal R eserve
Board, p rovid ed such p rom issory notes are secured by such n o t e s ,
d r a f t s , b i l l s o f exchange, or bankers* acceptances as are e l i g i b l e
fo r re d isco u n t or f o r purchase by F ederal re se r v e banks under the
p r o v is io n s o f t h i s A c t , or by th e d e p o sit or pledge o f bonds or
notes o f th e U nited S t a te s
At t h e ir m eeting on September 1 5 th our Board o f D ir e c to r s estab ­
li s h e d a r a t e o f 3 - 1 /S% p er annum on t h is c la s s of p ap er, which r a t e has been
approved by th e Federal R eserve Board, and we are now prepared to fu r n ish
any needed temporary accomnd&htffinn to our member banks in t h i s manner *
Two b la n k n o tes a re en clo sed herew ith fo r your use when r e q u ir e d ,
and a d d itio n a l n o tes w i l l be fu rn ish ed upon a p p lic a tio n ..
This s e r v ic e should a s s i s t our member banks in c a r in g f o r any unusual
temporary demands fo r funds pending the r e c e ip t o f a n tic ip a te d c o l l e c t i o n s , and
in a d d itio n shou ld enable them to keep t h e i r re se rv e d e p o sits w ith t h i s bank
in t a c t at a l l tim es and r e li e v e them from the n e c e s s it y of paying a minimum
p e n a lty o f s i x p er oenfcc on th e amount o f d e p le tio n in reduced re serv es#
The a t t e n t io n o f our member banks i s c a lle d t o th e fa o t th a t t h i s
p e n a lt y , as f i x e d by the F ed eral R eserve Board, i s to be imposed, in th e case
o f d e p leted r e s e r v e s , or. th e t o t a l d iffe r e n c e between the amount o f the
balance in t h e i r r e se r v e account on our books and the amount which they are
re q u ired by law to ca rry i n th a t accou n t, and th a t an excess balance one day
w i l l not count as an o f f s e t to a d ep leted balance o f seme oth er day#
We w i l l be p le a s e d to fu r n is h you w ith any a d d itio n a l in form ation
which you may d e s ir e r e l a t i v e to t h i s new f a c i l i t y o ffe r e d you by the Federal
R eserve Bank o f D a lla s#
Yours very t r u l y ,

Be L, VAN ZAXDT,
Governor»

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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