Full text of District Notices (Federal Reserve Bank of Dallas) : [Supplementing Circulars of March 6, 7, 8, 9, 10, 11, 13 and 14 - Additional Treasury Regulations Including Interpretation 10]

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FEDERAL RESERVE BANK
OF DALLAS

Dallas, Texas, March 16,1933.

To the Bank Addressed:

Supplementing our circulars of March 6, 7, 8, 9, 10, 11, 13 and 14, 1933, there are
quoted below for your information, certain additional regulations issued by the Secretary
of the Treasury under authority conferred upon him by proclamation of the President of
the United States declaring bank holiday:
“ Responding to inquiries today as to what facilities are available for enabling state
banks which are not members of the Federal Reserve System to obtain currency to meet
their n e e d s , Secretary of the Treasury Woodin called attention to the statement of
the President, in his radio talk on March 12, that these banks can and will receive assist­
ance from member banks and from the Reconstruction Finance Corporation. The Secre­
tary pointed out that Federal Reserve Banks are authorized to make advances to indi­
viduals, partnerships and corporations, on their promissory notes, for periods not ex­
ceeding 90 days, secured by direct obligations of the United S t a t e s , and non-member
banks may avail themselves of this privilege. The Federal Reserve Banks also are auth­
orized, he stated, to rediscount for member banks, with their endorsement, eligible and ac­
ceptable paper acquired from and bearing the signature or endorsement of non-member
banks; and to make advances to member banks secured by other paper acquired from non­
member banks.
The Secretary said that he understands that it is the purpose and desire of the Re­
construction Finance Corporation and the Federal Reserve Banks to be as helpful as pos­
sible in meeting the needs of the present situation.”
“ In response to many inquiries as to the significance of the appointment of conserva­
tors to banks of high repute I wish to say that there is no deduction to be made that such
banks are necessarily in difficulties. There are a lot of complications, some of them con­
cerning affiliate enterprises which make it impractical for banks to open to the full ex­
tent. It is for the purpose of insuring that the banks will be put in apple-pie order, pending
reorganization or other necessary processes that conservators in many cases are named.
Moreover, this method makes it possible that the bank so circumstanced will be able
to continue to render service, as for example, the receiving of deposits to be segregated
and kept in cash or invested in Government bonds and such like securities. It also enables
the conservator to set aside and make available for withdrawal by depositors payment to
other creditors on a ratable basis such amounts as in his opinion it is safe to use for this
purpose.”
“ The term mortgage loan companies as used in interpretation No. 3, is interpreted to
include all corporations whose principal business consists of the investment in, sale and
purchase of real estate mortgages and mortgage certificates guaranteed by such corpora­
tions.” Designated as interpretation 10.

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

“ Passing upon applications of member banks to reopen for normal banking functions
has taxed the personnel of the Treasury and of the Office of the Comptroller of the Cur­
rency. While every possible effort has been made to act upon all applications, delay in some
cases has been found to be inevitable, in some cases, also, steps are being taken which
as soon as completed will make it possible for reopening to be licensed. I, therefore, wish
to direct especial attention to the statement of the President in his radio address of last
Sunday: ‘Let me make it clear to you that if your bank does not open the first day you
are by no means justified in believing that it will not open. A bank that opens on one of
the subsequent days is in exactly the same status as the bank that opens tomorrow.’
Additional licenses will be issued from time to time and the public should understand
that banks hereafter licensed to be opened for normal functions are to be regarded in
same way as if it had been possible to issue the license by today.”
Yours very truly,

Governor.